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5('(),1,1* 5(6,/,(1&( 1 $ 7 8 5 $ / / < Redefining Resilience . . . Naturally
The whole world has been severely impacted by the Covid-19 pandemic, which has not only led to loss of lives and livelihoods, but has also brought businesses and services to a near grinding halt.
Exhibiting extraordinary resilience, which is naturally ingrained in us as part of our system, Bharat Petroleum swung into action to combat the disruption caused by the pandemic and adapt to the new normal. We leveraged our arsenal of innovation and technology, catalysed by the indomitable spirit and sheer tenacity of our workforce. We could navigate through uncharted waters, unlock the unknown and successfully meet the human, business and operational needs to keep the wheels of the nation moving.
No stone was left unturned to out-manoeuvre uncertainty. Our ‘Corona Warriors’ worked day and night, risking their own lives to ensure uninterrupted production and supplies of fuels to essential service providers, as well as domestic LPG customers. Health, safety and environment conservation remained our topmost priority.
Our infinite capacity to meet challenges, along with novel strategies for resource optimisation and risk mitigation, has enabled us to rebound strongly from the global downturn to repurpose and reshape the operations and supply chain, thereby ensuring our financial health and sustainability moving forward.
Being a fully integrated energy company, with a diverse product portfolio and an enviable customer-centric approach, we have focused on digitalisation, startups, R&D, niche petrochemicals, alternate fuels, energy efficiency, expansion in rural markets, optimising business processes and automating activities across the entire hydrocarbon value chain.
Backed by our inspiring vision, with passion to excel embedded in our DNA, we are redefining resilience, stretching beyond limits, as we spread optimism and hope and create significant value for our stakeholders and our nation.
BPCL ... Energising the new Energising the Nation
Contents
Chairman’s Letter 2
Board of Directors 4
Bankers, Auditors, Share Transfer Agent and Registered Office 5
Management Team 6
Vision, Values, Culture and Mission 7
Performance Highlights 8
Energising the Nation 12
Notice to Members 13
Directors’ Report 32
Management Discussion & Analysis Report 54
Report on CSR 92
Report on Corporate Governance 101
Business Responsibility Report 126
Comments of C & AG 146
Performance Profile 164
Standalone Financial Statements 170
Auditors’ Report 171
Balance Sheet and Statement of Profit & Loss 184
Cash Flow Statement 186
Consolidated Financial Statements 263 Chairman’s Letter
Dear Shareowners, throughput were higher at 43.36 MMT and 38.30 MMT At the outset, I wish you and your loved ones the best of respectively. Consolidating interests further, Bharat health and well-being! Oman Refineries Limited, hitherto our 50:50 JointV enture Company, has undergone a change in its equity structure, I am extremely happy to communicate with you for the consequent to conversion of warrants into equity shares, first time after taking over additional charge of Chairman raising BPCL’s equity shareholding to 63.38%. and Managing Director of your Company. Leveraging organic and inorganic growth opportunities The year 2019-20 that progressed well until December over the years, your Company has expanded its footprint 2019, witnessed unprecedented and confounding across the hydrocarbon value chain and become a fully changes, transitions and economic severities in the last integrated oil and gas player. quarter. The COVID-19 pandemic brought the world to a standstill, with most countries, including ours, resorting Pursuing the Go-GDP strategy, your Company has taken to lockdowns and containment measures to check the definitive steps towards fostering aG reener environment, spread of the disease. As global economies gradually permeating Digitalisation in all aspects of business and open up and activity resumes, it reminds me of a famous firming up its footprints in the Petrochemicals portfolio. quote by Confucius, “Our greatest glory is not in never Our successful pilots of the newly launched “E-Drive” falling, but in rising every time we fall.” initiative - an innovative electric vehicle mobility model using Amidst these adversities, your Company emerged BPCL’s Retail Outlets as battery swapping stations pave stronger, exhibiting a resolute approach, identifying the way for pan India expansion. Our presence across the opportunities, thus redefining resilience. alternate fuels / energy solutions will enable swift scale up once these verticals prime up and economics improve. Playing a leading role in nation building, your Company ensured uninterrupted supplies of petroleum products The importance of Digitalisation cannot be over- and has been in the frontline of service during the emphasised in a world which is converging towards a pandemic. Mindful of the evolving risks on various fronts, new normal post pandemic. Creating a digital ecosystem we have focussed on safe operations, optimisation of has been our immediate priority and the Company resources and enhancement of efficiencies, leveraging has taken major strides in proliferation of digitalisation technology and digitalisation to skilfully navigate through across operations, particularly refining operations and these challenging times. management, and customer facing interfaces. The extreme volatility in the crude oil prices and foreign I am happy to share that the Propylene Derivative exchange rates and the pandemic-induced disruption in Petrochemical Project (PDPP) at Kochi Refinery (KR) for economic activity at the end of the year 2019-20 severely manufacturing niche petrochemicals is completed and impacted the annual financial performance, resulting in will start commercial production soon. The project to an overall decline in the profits of the Company for the produce Polyols and related products at KR is on track year. The profit after tax, on a standalone basis, declined and will add to our growing petrochemicals portfolio, to ` 2,683 crores, mainly due to lower refining margins generating substantial value going forward. and substantial inventory and foreign exchange variation In a major step towards enhancing the distribution losses. However, your Company has been able to better network and reaching nearer to customers, your its physical performance, despite significant loss of sales Company commissioned 1,447 new Retail Outlets across in March 2020 and achieved market sales and refinery the country, the highest in a financial year amongst the throughput of 43.10 MMT and 31.91 MMT respectively. PSU OMCs. BPCL also commissioned 118 vehicles fitted I am happy to share that your Company was the only with dispensers, once again the highest amongst PSU Oil Marketing Company (OMC) amongst PSU OMCs to OMCs, under the new initiative of door-to-door delivery of register a growth in physical performance during the year. Diesel to stationary engines / generators and mining and The Board of Directors declared a dividend of 165% in the construction equipment. Customer centricity being an month of March 2020. integral part of BPCL’s culture, the Company has created At the group level, the profit after tax attributable to BPCL newer benchmarks in customer service and carved a stood at ` 3,055 crores, while market sales and refinery niche for itself. 2 Towards exploring innovative solutions to identified Before I conclude, I would like to thank all the stakeholders business concerns and simultaneously supporting the for their immense contribution and wholehearted support startup ecosystem making India self-reliant, your Company in designing our success and partnering in all our launched a unique grand challenge for startups, with endeavours and aspirations. We fully acknowledge the prize money for winners as well as creating opportunities valuable guidance and inspiration from the Ministry of to partner with BPCL. Going forward, BPCL is committed Petroleum and Natural Gas. I would also like to place on to support startups in a variety of ways, including grant of record the deepest appreciation for the relentless efforts, funds, equity investment, business exposure, mentoring unparalleled dedication and unmatched loyalty of our and guidance. employees, who are our biggest asset, together with Amidst the pandemic crisis, when Health, Safety, Security our network of dealers, distributors, business partners, and Environment (HSSE) is gaining traction globally, BPCL vendors and service providers. We are thankful for the has always recognised it as the topmost priority. Further confidence reposed in us by the investors and customers, strengthening the HSSE framework, your Company which gives us courage to dream, strength to accomplish has put in place comprehensive pandemic compliant and incentive to excel. protocols across all touchpoints to ensure safety of all Humanity occupies centre stage at this juncture and we including employees, customers, vendors and partners. in Bharat Petroleum have always taken the lead in service Capitalising on the ‘work from home’ norm, we have before self. Our dynamic teams have demonstrated deep seamlessly managed business operations across all reserves of resilience in responding swiftly to the needs functions in the organisation, leading to limited onsite of the nation and will continue to ceaselessly serve our presence of manpower in these dire circumstances. nation. We take pride in touching lives and making a Remaining steadfast towards being a learning organisation, difference. we have also utilised this opportunity of ‘work from home’ As the impending wave of transition, structural and to augment people capabilities and upgrade their skill sectoral, reshapes the Company and rearranges sets through various technologically enabled initiatives the energy matrix, I firmly believe that BPCL, with its like digital learning and purposeful engagement. farsightedness, responsiveness, agility and fortitude will With the Government of India’s decision to sell its stake in continue to occupy its central position in the industry and BPCL to a strategic buyer, your Company is at the threshold scale newer heights in times to come. of a major transformation, which is expected to unlock Stay safe and healthy ! immense value by way of enhanced professionalism, access to advanced technologies, newer global markets, Warm regards, a diversified product portfolio and improved availability of resources and capital. This will create significant value for all stakeholders. The market capitalisation of your Company scaled peaks during the year and even surpassed the market capitalisation of the largest PSU OMC on a couple of occasions, bearing testimony to the K. Padmakar rising investor confidence in BPCL’s intrinsic value. Chairman & Managing Director 3 Board of Directors
K. Padmakar D. RAJKUMAR Chairman & Managing Director Chairman & Managing Director (w.e.f. 1.9.2020) (up to 31.8.2020) Director (Human Resources)
R. Ramachandran Arun Kumar Singh N. Vijayagopal Director (Refineries) Director (Marketing) Director (Finance) (up to 31.8.2020)
Dr. K. Ellangovan Rajiv Bansal Rajesh Aggarwal Principal Secretary (Industries), Additional Secretary & Financial Advisor, Additional Secretary & Financial Advisor, Govt. of Kerala MoP&NG (up to 7.1.2020) MoP&NG (w.e.f. 8.1.2020)
Rajesh Kumar Mangal Vishal V Sharma Jane Mary Shanti Sundharam Independent Director Independent Director Independent Director (up to 30.11.2019) (up to 8.2.2020) (up to 4.3.2020)
Vinay Sheel Oberoi Harshadkumar P. Shah Independent Director Independent Director (up to 9.4.2020) (w.e.f. 16.7.2019) 4 (L to R) : Mr. N. Vijayagopal, Director (Finance) | Mr. R. Ramachandran, Former Director (Refineries) Mr. D. Rajkumar, Former Chairman & Managing Director Mr. K. Padmakar, Chairman & Managing Director | Mr. Arun Kumar Singh, Director (Marketing)
Bankers Auditors Share transfer Agent
M/s. CVK & Associates • State Bank of India 2, Samarth Apartments, • Standard Chartered Bank Ground Floor, • BNP Paribas D. S. Babrekar Road, • Union Bank of India Off Gokhale Road (North), Data Software Research Dadar (W), Mumbai 400 028. Co. Pvt. Ltd. • Corporation Bank 19 Pycrofts Garden Road, • Bank of India M/s. Borkar & Muzumdar Nungambakkam, • Deutsche Bank 21/168, Anand Nagar Chennai 600 006. • ICICI Bank Om C. H. S., • HDFC Bank Anand Nagar Lane, • IDBI Bank Vakola, Santacruz (East), Mumbai 400 055.
RegistEred Office Bharat Petroleum Corporation Ltd. CIN: L23220MH1952GOI008931 Bharat Bhavan, P. B. No. 688, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai 400 001 Phone: 2271 3000 / 4000 • Fax: 2271 3874 Email: [email protected] • Website: www.bharatpetroleum.in
5 Management Team Mr. Sunil Jain Chief Vigilance Officer Mr. M. Prasanna Kumar CGM (Planning & Project Coordination) Dr. D. C. Patra ED (Planning) Mr. M. R. Chaturvedi CGM (Comp. & Ben.) Mr. G. Krishnakumar ED (HRD) Mr. M. R. Subramoni Iyer CGM (Refinery Operations), Kochi Refinery Mr. J. S. Shah ED (HRS) Mr. N. Shukla CGM (Planning) Mr. L. R. Jain Chief Procurement Officer (Marketing) Mr. P. Anilkumar CGM Pipelines (Ops. & Projects) Mr. M. A. Khan ED (Corp. Coordination & Development) Mr. P. K. Bhowmick Chief Procurement Officer (Refineries) Mr. M. S. Patke ED (Biofuels) Mr. Pushp Kumar Nayar Head Supply Chain Management (Lubes) Mr. Murali Madhavan P. ED (Kochi Refinery) Mr. P. K. Ramanathan CGM Logistics (LPG) HQ Mr. P. S. Ravi ED (Retail) I/C Ms. P. Rajeswari CGM (Vigilance) Mr. Priyotosh Sharma ED (Gas) Mr. P. Sudhahar Project Lead (Gas) HQ Mr. P. V. Ravitej ED (Mumbai Refinery) Mr. Prabhu Venkatesh CGM (Refineries Finance), Mumbai Mr. R. Narayanan ED (Information Systems) Mr. Ramakrishnan N. Head BPEC Mr. R. P. Natekar ED (Planning & Corporate Affairs) I/C Mr. Ramakrishnan T. N. CGM (Rural Initiatives) Retail, Chennai Mr. Ravi Pratap Singh ED (HSSE) Mr. Ramesh S. Team Member (Infra T/F) HQ Mr. S. Bhargava ED (Research & Development) Mr. Ravikumar V. CGM (Research & Development) Mr. Santosh Kumar ED (Lubes) Mr. Ravindra V. Deshmukh Regional LPG Manager, West Mr. S. K. Agrawal ED (Internal Audit) Mr. R. P. Singh CGM (E & AS) Mumbai Refinery Mr. Subikash Jena ED (I&C) Mr. Sanjeev Agrawal CGM (Retail Engg. & Ms. Sujata N. Chogle ED (Legal) Compressed Biogas Project) RHQ Mr. Sukhmal K. Jain Head (Retail) East Mr. S. Khanna CGM (Operations), Mumbai Refinery Mr. Surjeet Mahalik Head (Retail) North Mr. Sanjeeb K. Paul CGM (Biofuels) Mr. T. Peethambaran ED (LPG) Mr. Sanjeev Raina CGM (HSSE) Mr. V. Jacob ED (Quality Control Cell) Mr. Shrikant Yadwadkar CGM (Sales), Gas ED (Engineering & Projects) Mr. Y. V. Apte Mr. Sreeram A. N. CGM (Project Technical & Petchem), Mr. Abhay Shah CGM Strategy & Brand (Lubes) Kochi Refinery Mr. A. R. Shah CGM (Projects Procurement), Mr. Subhankar Sen CGM (Retail Initiatives & Brand) HQ Mumbai Refinery Mr. Subhasis Mukherjee CGM (Internal Audit) Mr. Arul Muthunathan V. CGM (RNP & RE) HQ Mr. Sunil Kumar CGM Projects (Rasayani), Mr. Bibhudutta Mishra Regional Manager (Lubes) North Mumbai Refinery Mr. Chacko M. Jose CGM (Special Projects), Mumbai Refinery Mr. Suresh John CGM (Engg. Projects & Contract Mgt.), Mr. Debashis Ganguli CGM (P & AD) Lubes Kochi Refinery Mr. Deepak Jha CGM (OEM), Lubes Mr. S. Srinivasan CGM Sales (I&C) HQ Mr. Dinabandhu Mandal CGM (Logistics), Retail Ms. Teresa Naidu CGM (Corporate Treasury) Mr. D. V. Mamadapur CGM (Supply Chain Optimization) Mr. T. V. Rama Rao CGM IS & Digital Strategy (MR & KR) Ms. Geeta V. Iyer CGM Finance (Taxation) Mr. V. Chandrasekaran CGM (Prod.Desp. & Trombay Terminal Mr. J. Vedagiri CGM (LPG Infrastructure) Projects), Mumbai Refinery Mr. K. Ajith Kumar CGM (Projects), Kochi Refinery Mr. Varinder S. Chadha CGM (Corporate Finance) Mr. Kani Amudhan N. CGM (Marketing Corporate) Mr. V. N. Herwadkar CGM (Contract Mgt. & Administration), Mr. K. A. Trivedi CGM (International Trade) Mumbai Refinery Mr. Kurian Parambi CGM (HR), Mumbai Refinery Mr. Vijay N. Tilak CGM Sales & LPG Marketing Strategy, HQ Mr. Kurian P. Alapatt CGM (HR), Kochi Refinery Mr. Vijay Ranjan CGM (Aviation) Mr. Lalit K. Watts CGM (HRS), North Mr. Anil Ahluwalia GM (Employee Satisfaction Enhancement) Mr. Mahadevan Easwaran S. CGM (IS Technology) Ms. Kala V. Company Secretary Mr. Mahesh Narain CGM (Gas Projects), Delhi Mr. Rahul Tandon GM (Corporate Strategy) Mr. Mohammad Gayasuddin CGM Engg. (E&P) North Mr. Syed Abbas Akhtar GM (Brand & PR) 6
8 Vision • We are the most admired global energy company leveraging talent and technology • We are the first choice of customers, always • We exploit profitable growth opportunities outside energy • We are the role model for Health, Safety, Security & Environment • We are a great organisation to work for • We are a learning organisation • We are a model corporate entity with social responsibility
Values • Trust is the bedrock of our existence • Customer Centricity is intrinsic to our achievements • Development of People is the only way to success • Ethics govern all our actions • Innovation is our daily inspiration • Collaboration is the essence of individual action • Involvement is the way we pursue our organisation goals
Culture • We remain result focused with accountability for governance • We collaborate to achieve organisational goals • We enroll people through open conversations • Our every action delivers value to the customer • We proactively embrace change • We care for people
Mission • Participate prominently in nation-building by meeting its growing energy needs, and to support this endeavour, pursue the creation of economic surplus by efficiently deploying all available resources and aiming towards global competitiveness in the energy sector • Strengthen and expand areas of core competencies throughout the country, total quality management in all spheres of business and maintain the status of a leading national company • Create awareness among people on the imperatives of energy conservation and efficient consumption of petroleum resources, by disseminating information through appropriate media • Availing ourselves of new opportunities for expansion / diversification arising from the liberalisation of the economy to achieve a global presence • Promote ecology, environmental upgradation and national heritage 7
8 Performance Highlights
Gross Revenue from Operations is ` 3,27,580.78 Crores Refinery throughput increases to 31.91 MMT Market Sales including exports surges to 45.72 MMT Net Profit is ` 2,683.19 Crores Market Share soars to 24.52 %
8
energising the nation
12 NOTICE TO THE MEMBERS Notice is hereby given that the 67th Annual General Meeting of the Members of Bharat Petroleum Corporation Limited (“the Company”) will be held on Monday, 28th September, 2020, at 11.00 a.m. IST through Video-Conferencing (“VC”) / Other Audio Visual Means (“OAVM”) to transact the following Ordinary and Special Business:- A. Ordinary Business 1) To receive, consider and adopt (a) the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2020 (b) the Audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2020; and the Reports of the Board of Directors, the Statutory Auditors and the Comments of the Comptroller & Auditor General of India thereon. 2) To confirm the payment of Interim Dividend on Equity Shares for the Financial Year ended 31st March, 2020. 3) To appoint a Director in place of Dr. K. Ellangovan, Director (DIN: 05272476), who retires by rotation and being eligible, offers himself for reappointment. 4) To authorize the Board of Directors of the Company to fix the remuneration of the Joint Statutory Auditors of the Company for the Financial Year 2020-21 in terms of the provisions of Section 139(5) read with Section 142 of the Companies Act, 2013 and to consider and, if thought fit, to pass the following Resolution, as an Ordinary Resolution:- “RESOLVED THAT the Board of Directors of the Company be and is hereby authorised to decide and fix the remuneration of the Joint Statutory Auditors of the Company as appointed by the Comptroller & Auditor General of India for the Financial Year 2020-21, as may be deemed fit by the Board.” B. Special Business 5) Appointment of Shri Rajesh Aggarwal as Director To consider and, if thought fit, to pass the following Resolution, as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions of the Companies Act, 2013 and the Rules framed thereunder as amended from time to time, Shri Rajesh Aggarwal (DIN: 03566931), who was appointed by the Board of Directors as an Additional Director with effect from 8th January, 2020 and who holds office up to the date of this Annual General Meeting of the Company in terms of Section 161 of the Companies Act, 2013 and in respect of whom the Company has received a Notice in writing under Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director of the Company, be and is hereby appointed as Director of the Company, liable to retire by rotation.” 6) Approval of Remuneration of the Cost Auditors for the Financial Year 2020-21 To consider and if thought fit, to pass the following Resolution, as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 as amended from time to time, the Cost Auditors viz. M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai and M/s. G.R. Kulkarni & Associates, Cost Accountants, Mumbai, appointed by the Board of Directors of the Company to conduct the audit of the cost records of the Company for the Financial Year ending 31st March, 2021 be paid the remuneration as set out below:
Name of the Cost Auditor Activities / Location Audit Fees M/s. R. Nanabhoy & Co., BPCL’s activities where cost records are to ` 2,75,000/-plus applicable taxes Mumbai (Lead Auditor) be maintained including Refineries, products and reimbursement of out-of- pipelines, etc. (other than Lubricants) pocket expenses. M/s. G.R. Kulkarni & Lube Oil Blending Plants; Wadilube; ` 1,25,000/-plus applicable taxes Associates, Mumbai Tondiarpet; Budge-Budge and Loni and reimbursement of out-of- pocket expenses.
Annual Report 2019-20 13 RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all such acts, deeds and things, and to take all such steps as may be necessary or expedient to give effect to this Resolution.” 7) Approval of Material Related Party Transactions To consider and, if thought fit, to pass the following Resolution, as an Ordinary Resolution: “RESOLVED THAT pursuant to the Regulation 23 and other applicable Regulations of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (“Regulations”), approval of the Company be and is hereby accorded for the contracts, arrangements and transactions entered into and/or to be entered into with Bharat Oman Refineries Limited, a Related Party under Section 2(76) of the Companies Act, 2013 and the Regulations, for transfer or receipt of products, goods, materials, services or other resources and obligations for the Financial Year 2019-20 and subsequent Financial Years exceeding ten percent of the annual consolidated turnover of the Company, as per the last audited financial statements of the Company relevant for the respective Financial Years on such terms and conditions as may be mutually agreed between the Company and Bharat Oman Refineries Limited. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to decide upon the nature and value of the products, goods, materials, services or other resources and obligations to be transacted with Bharat Oman Refineries Limited and to do and perform all such acts, deeds, matters and things as may be considered necessary, desirable or expedient for giving effect to this Resolution.” 8) Approval of ‘BPCL Employee Stock Purchase Scheme 2020’ To consider and, if thought fit, to pass the following Resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Section 62(1)(b) and all other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder, Regulations 3, 6 and Part B of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with Circular No. CIR/CFD/ POLICY CELL/2/2015 issued by the Securities and Exchange Board of India on 16th June 2015(collectively referred to as “SEBI SBEB Regulations”), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Memorandum and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary from any other authorities, if any, and such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions, approval and consent of the Company be and are hereby accorded respectively to the “BPCL Employee Stock Purchase Scheme 2020” (“ESPS 2020”/ “Scheme”) and the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include the Nomination & Remuneration Committee or any other Committee, which the Board has constituted or may constitute to exercise its powers, including the powers conferred by this Resolution and SEBI SBEB Regulations) to offer for purchase of fully paid-up equity shares of the Company of face value of ` 10 (Rupees Ten) each, to or for the benefit of permanent employees including those on deputation to the Subsidiary Company(ies), Joint Ventures, Petroleum Planning and Analysis Cell (PPAC), etc. and/or Executive/Whole-time Director(s) of the Company, and Executive / Whole-time Director(s) of its Subsidiary Company(ies) who are on lien with the Company, under the Scheme, as may be decided solely by the Board in accordance with the SEBI SBEB Regulations and other applicable laws, with authorisation to make such offers from time to time, in one or more tranches, not exceeding 4,33,85,000 (Four Crores Thirty Three Lakhs Eighty Five Thousand) equity shares in aggregate, to be acquired through an Employee Welfare Trust, namely the ‘BPCL ESPS Trust’ (“Trust”), to be set up by the Company by way of secondary acquisition for the purpose of holding and transferring to such eligible employees, upon their purchase, on such terms and conditions as may be determined by the Board, in accordance with the provisions of the Scheme. RESOLVED FURTHER THAT the equity shares to be transferred as mentioned hereinbefore shall rank pari passu with the then existing equity shares of the Company. RESOLVED FURTHER THAT in case of any corporate action(s) such as sub-division, consolidation of shares, rights issues, bonus issues, reorganization of capital structure of the Company and others, if there is any change
14 Bharat Petroleum Corporation Limited in the total number of paid-up equity shares, then the above ceiling of equity shares and the purchase price payable by the eligible employees shall be deemed to be increased or decreased in line with such change in total paid-up equity shares and/or face value thereof. RESOLVED FURTHER THAT the Company and the Trust shall conform to the accounting policies prescribed from time to time under Regulation 15 of the SEBI SBEB Regulations. RESOLVED FURTHER THAT the Board be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things including authorizing to appoint Merchant Banker(s) and such other appropriate agencies, if required and to sign deeds, documents, letters and such other papers as may be necessary, desirable and expedient, as it may in its absolute discretion deem fit or necessary or desirable for such purpose, including giving effect to this Resolution with power on behalf of the Company to settle any issues, questions, difficulties or doubts that may arise in this regard, in conformity with the provisions of the Companies Act, 2013, SEBI SBEB Regulations, the Memorandum and Articles of Association of the Company and other applicable laws.” 9) Approval of offer of shares under the ‘BPCL Employee Stock Purchase Scheme 2020’ to the Executive/ Whole-time Director(s) of Subsidiary Company(ies) who are on lien with the Company To consider and, if thought fit, to pass, the following Resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Section 62(1)(b) and all other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder, Regulations 3, 6 and Part B of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with Circular No. CIR/CFD/ POLICY CELL/2/2015 issued by the Securities and Exchange Board of India on 16th June 2015 (collectively referred to as “SEBI SBEB Regulations”), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Memorandum and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary from any other authorities, if any, and such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions, consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include the Nomination & Remuneration Committee or any other Committee, which the Board has constituted or may constitute to exercise its powers, including the powers conferred by this Resolution and SEBI SBEB Regulations) to offer for purchase of fully paid-up equity shares of the Company of face value of ` 10 (Rupees Ten) each, to or for the benefit of Executive or Whole-time Directors of the Subsidiary Company(ies) who are on lien with the Company, under the “BPCL Employee Stock Purchase Scheme 2020” (“ESPS 2020” / “Scheme”) as may be decided solely by the Board in due compliance with the SEBI SBEB Regulations and other applicable laws, with authorisation to make such offers from time to time, in one or more tranches, subject to the overall ceiling of equity shares envisaged in the Scheme, and on such terms and conditions as may be determined in accordance with the provisions of the Scheme.” 10) Approval of secondary acquisition of shares through the Trust route for the implementation of the ‘BPCL Employee Stock Purchase Scheme 2020’ To consider and, if thought fit, to pass, the following Resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Section 62(1)(b) and all other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder, Regulations 3, 6 and Part B of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with Circular No. CIR/CFD/ POLICY CELL/2/2015 issued by the Securities and Exchange Board of India on 16th June 2015 (collectively referred to as “SEBI SBEB Regulations”), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Memorandum and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary from any other authorities, if any, and such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions, consent of the Company be and is hereby accorded, authorising the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include the
Annual Report 2019-20 15 Nomination & Remuneration Committee or any other Committee, which the Board has constituted or may constitute to exercise its powers, including the powers conferred by this Resolution and SEBI SBEB Regulations) to acquire, in a financial year, total number of equity shares not exceeding ceiling of 2% (two percent) of the paid-up equity share capital of the Company as at the end of the financial year immediately prior to the year in which approval is obtained for secondary acquisition, as prescribed under the SEBI SBEB Regulations, to be acquired from time to time, in one or more tranches, through an Employee Welfare Trust, namely the ‘BPCL ESPS Trust (“Trust”) to be set up by the Company by way of secondary acquisition for the sole purpose of implementation of the ‘BPCL Employee Stock Purchase Scheme 2020’ (“ESPS 2020”/ “Scheme”) in due compliance with the provisions of the SEBI SBEB Regulations and other applicable laws. RESOLVED FURTHER THAT in case of any corporate action(s) such as rights issues, bonus issues, change in capital structure, or other reorganisation, if any, additional equity shares are required to be issued by the Company to its shareholders, the ceiling aforesaid in terms of number of equity shares intended to be purchased by the Trust from secondary acquisition shall be deemed to increase in proportion of such additional equity shares issued, to facilitate making of a fair and reasonable adjustment as per the provisions of the SEBI SBEB Regulations. RESOLVED FURTHER THAT the Trust shall not deal in derivatives and shall undertake only delivery based transactions for the purpose of secondary acquisition as permitted under the SEBI SBEB Regulations. RESOLVED FURTHER THAT the Trustees of the Trust shall not vote in respect of the shares acquired and held by such Trust. RESOLVED FURTHER THAT the Trustees of the Trust shall ensure compliance of the provisions of the SEBI SBEB Regulations, Rules made under the Companies Act, 2013 and all other applicable laws at all times in connection with acquisition, holding and dealing in the shares of the Company including, but not limited to, maintenance of proper books of accounts, records and documents with appropriate disclosures as prescribed.” 11) Provision of money by the Company for purchase of its own shares by the Trust for the benefit of employees under the ‘BPCL Employee Stock Purchase Scheme 2020’. To consider and, if thought fit, to pass, the following Resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Section 67(3)(b) and all other applicable provisions, if any, of the Companies Act, 2013 read with Rule 16 of the Companies (Share Capital and Debentures) Rules, 2014 (“SCD Rules”), Regulation 3(8) of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (“SEBI SBEB Regulations”), the Memorandum and Articles of Association of the Company and subject further to other such approvals, permissions and sanctions as may be necessary from any other authorities, if any, and such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions, the approval of the Company be and is hereby accorded, authorizing the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include the Nomination & Remuneration Committee or any other Committee, which the Board has constituted or may constitute to exercise its powers, including the powers conferred by this Resolution and SEBI SBEB Regulations) to grant loan, provide guarantee or security in connection with a loan or provide financial assistance, from time to time, in one or more tranches, subject to such other terms as may be determined by the Board, to the ‘BPCL ESPS Trust’ (“Trust”) to be setup by the Company for purchase of fully paid-up equity shares of the Company by way of secondary acquisition in connection with implementation of the ‘BPCL Employee Stock Purchase Scheme 2020’ (“ESPS 2020”/ “Scheme”), by such sum of money not exceeding the ceiling as contemplated under Rule 16(1)(d) of the SCD Rules. RESOLVED FURTHER THAT the Trust shall use the loan amount disbursed from time to time only for the purposes of the Scheme, strictly in accordance with the provisions of SEBI SBEB Regulations. RESOLVED FURTHER THAT any loan provided by the Company shall be interest free, with the tenure of such loan based on the terms of the Scheme, and shall be repayable to the Company upon realization of proceeds on the permitted sale/ transfer of shares and any other income of the Trust.
16 Bharat Petroleum Corporation Limited RESOLVED FURTHER THAT subject to the broad terms above, the Board be and is hereby authorized to do all such acts, deeds, matters and things, as may at its absolute discretion deems fit, to settle any issues, questions, difficulties or doubts that may arise in this regard, including any modification in the terms of loan, without being required to seek any further consent or approval of the members and further, to execute all such documents, writings and to give such directions and/ or instructions as may be necessary or expedient.” By Order of the Board of Directors
Sd/- (V. Kala) Company Secretary Place: Mumbai Date: 5th September, 2020
Registered Office: Bharat Bhavan, P. B. No. 688, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai 400 001 CIN: L23220MH1952GOI008931 Phone: 2271 3000 / 4000 Fax: 2271 3874 email: [email protected] Website: www.bharatpetroleum.in
Notes : 1. In view of the massive outbreak of the COVID-19 pandemic, pursuant to the Circular No. 14/2020 dated 8th April 2020, Circular No.17/2020 dated 13th April 2020 and Circular No. 20/2020 dated 5th May 2020 issued by the Ministry of Corporate Affairs (MCA) and Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 issued by the Securities and Exchange Board of India (SEBI) (hereinafter collectively referred to as “the Circulars”), physical attendance of the Members at the Annual General Meeting (AGM) venue is not required and the AGM will be held through VC or OAVM. Hence, Members can attend and participate in AGM through VC/ OAVM or view the live webcast at www.evoting.nsdl.com. In compliance of provisions of Regulation 44 (6) of SEBI Regulations, top 100 Listed Companies with Market Capitalisation are required to provide the facility of the live webcast of the proceedings of the General Meeting. Accordingly BPCL is arranging a live webcast for the members. 2. A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on a poll instead of himself and the proxy need not be a Member of the Company. Since the present AGM is being held through VC / OAVM pursuant to the MCA Circulars, the facility to appoint a proxy to attend and cast a vote for the Member is not available. However, the Body Corporates are entitled to appoint authorised representatives to attend the AGM through VC/OAVM and participate thereat and cast their votes through e-voting. 3. Since the present AGM is being held through VC/OAVM, Proxy form, Attendance Slip and Route map are not enclosed to the notice. 4. The Explanatory Statements pursuant to Section 102 of the Companies Act, 2013 are annexed hereto. The Board of Directors has considered and decided to include Item Nos. 5, 6, 7, 8, 9, 10 and 11 given above as Special Business in the AGM, as they are unavoidable in nature. 5. The Members can join the AGM in the VC/OAVM mode 30 minutes before and after the scheduled time of the commencement of the Meeting. The facility of participation at the AGM through VC/OAVM will be made available for 1000 members on first come first served basis. This will not include large Shareholders (Shareholders holding 2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, Auditors, etc. who are allowed to attend the AGM without restriction on account of first come first served basis. 6. The presence of the Members attending the AGM through VC/OAVM will be counted for the purpose of reckoning the quorum under Section 103 of the Companies Act, 2013. 7. Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of SEBI (Listing Obligations
Annual Report 2019-20 17 & Disclosure Requirements) Regulations, 2015 (as amended) (Regulations), and the Circulars issued by the MCA, the Company is providing the facility of remote e-voting to its Members in respect of the business to be transacted at the AGM. For this purpose, the Company has entered into an agreement with National Securities Depository Limited (NSDL) for facilitating voting through electronic means, as the authorized agency. The facility of casting votes by a member using the remote e-voting system as well as the electronic voting system at the AGM will be provided by NSDL. In line with the MCA Circular No. 17/2020 dated 13th April, 2020, the Notice convening the AGM and Annual Report will be available on the website of the Company at https://www.bharatpetroleum.com/Bharat-Petroleum- For/Investors/Shareholders-Information/Annual-Reports.aspx. The Notice and Annual Report can also be accessed from the websites of the Stock Exchanges i.e., BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively and will also be available on the website of NSDL (agency for providing the remote e-voting facility) i.e. www.evoting.nsdl.com. In terms of the MCA Circulars and SEBI Circular dated 12th May 2020, Notice of the AGM along with the Annual Report 2019-20 is sent only through electronic mode to those Members whose email addresses are registered with the Company/Depositories. For receiving the Annual Report and all other communications from the Company electronically: a. Members holding shares in physical mode and who have not registered / updated their email address with the Company are requested to register / update the same by writing to the RTA of the Company, M/s Data Software Research Co. Pvt. Ltd. email id: [email protected] with details of folio number and attaching a self-attested copy of PAN card. b. Members holding shares in dematerialised mode are requested to register / update their email addresses with the relevant Depository Participant. c. If there is any change in the e-mail ID already registered with the Company/RTA, Members are requested to immediately notify such change to the Company/RTA in respect of shares held in physical form and to DPs in respect of shares held in electronic form. 8. The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday, 22nd September, 2020 to Monday, 28th September, 2020 (both days inclusive) for the purpose of the AGM. 9. In terms of Regulation 40 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, securities of listed companies can be transferred only in dematerialized form with effect from 1st April, 2019 except in case of requests received for transmission or transposition of securities. 10. All documents referred to in the Notice will also be available electronically for inspection during office hours without any fee by the members from the date of circulation of the Notice upto the date of AGM. Members seeking to inspect such documents can send an email to [email protected]. 11. The Register of Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Act, the Register of Contracts or Arrangements in which the Directors are interested, maintained under Section 189 of the Act, and the relevant documents referred to in the Notice will be available electronically for inspection by the Members during the AGM. Members desiring inspection of such Registers during the AGM may send their request in writing to the Company at [email protected]. 12. Members seeking any information with regard to the accounts or any matter to be placed at the AGM, are requested to write to the Company on or before Monday, 21st September, 2020 through email on [email protected]. The same will be replied by the Company suitably through email. 13. As required under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a brief resumes of persons seeking appointment/reappointment as Directors under Item Nos. 3 and 5 of the Notice, are attached. 14. As per the provisions of Section 72 of the Companies Act, 2013, facility for making nomination is available to individuals holding shares in the Company. Members holding shares in physical form may obtain the Nomination Form from the Company’s Secretarial Department at its Registered Office or from the Registrar and Transfer
18 Bharat Petroleum Corporation Limited Agent (RTA) or can download the form from the Company’s website viz. www.bharatpetroleum.in. Members holding shares in electronic form have to approach their Depository Participants (DPs) for completing the nomination formalities. 15. The unclaimed dividends of BPCL and erstwhile Kochi Refineries Limited (KRL) for the Financial Years up to 1993-94 have been transferred by the Companies to the General Revenue Account of the Central Government, which can be claimed by the Members from the Office of the Registrar of Companies at Mumbai and Kochi, respectively. 16. a) Pursuant to Section 124 and 125 of the Companies Act, 2013, any amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the Unpaid Dividend Account of the Company is required to be transferred to the Investor Education & Protection Fund (IEPF) established by the Central Government. The unclaimed dividends for the Financial Years from 1994-95 to 2011-12 have been transferred to the said Fund, and no claim shall lie against the Company, for the amount of dividend so transferred. b) In terms of Section 124(6) of the Companies Act, 2013, read with the IEPF Rules as amended, all the shares in respect of which dividend has remained unpaid/unclaimed for seven consecutive years or more are required to be transferred to an IEPF Demat Account. Accordingly, shares in respect of unclaimed dividend for the financial year 2011-12 have been transferred to an IEPF Demat Account. In the event of transfer of shares and the unclaimed dividends to IEPF, Members are entitled to claim the same from IEPF by submitting an online application in the prescribed Form IEPF-5 available on the website www.iepf.gov.in. Members can file only one consolidated claim in a financial year as per the IEPF Rules. c) Members of BPCL who have not yet encashed their dividend warrant(s) for the Financial Year 2012-13 or dividend warrants(s) for any subsequent financial years are requested to make their claims without any delay to the Registrar & Share Transfer Agent/Company. It may be noted that the unclaimed amount of dividend for the Financial Year ended 31st March, 2013 becomes due for transfer to IEPF Authority on 26th October, 2020. It may please be noted that if no claim/application is received by the Company or the Company’s RTA for the Financial Year 2012-13 before the said date, the Company will be compelled to transfer the underlying shares to the IEPF. The Instructions for members for Remote E-Voting are as under :- The remote e-voting period begins on Thursday, 24th September, 2020, at 9:00 a.m. and ends on Sunday, 27th September, 2020, at 5:00 p.m. The remote e-voting module shall be disabled by NSDL for voting thereafter. The way to vote electronically on the NSDL e-Voting system consists of “Two Steps” which are mentioned below: Step 1: Log-in to NSDL e-Voting system at https://www.evoting.nsdl.com/ Step 2: Cast your vote electronically on NSDL e-Voting system. Details on Step 1 is mentioned below: How to Log-in to the NSDL e-Voting website? 1. Visit the e-Voting website of NSDL. Open the web browser by typing the following URL: https://www.evoting. nsdl.com/ either on a Personal Computer or on a mobile. 2. Once the home page of the e-Voting system is launched, click on the icon “Login” which is available under the ‘Shareholders’ section. 3. A new screen will open. You will have to enter your User ID, your Password and a Verification Code as shown on the screen. Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically.
Annual Report 2019-20 19 4. Your User ID details are given below :
Manner of holding shares i.e. Demat (NSDL Your User ID is: or CDSL) or Physical a) For Members who hold shares in demat 8 Character DP ID followed by 8 Digit Client ID (CL ID) account with NSDL. For example if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12****** b) For Members who hold shares in demat 16 Digit Beneficiary ID account with CDSL. For example if your Beneficiary ID is 12************** then your user ID is 12************** c) For Members holding shares in Physical EVEN Number followed by Folio Number registered with the Form. company For example if your folio number is 001*** and EVEN is 101456 then user ID is 101456001*** 5. Your password details are given below: a) If you are already registered for e-Voting, then you can use your existing password to login and cast your vote. b) If you are using NSDL e-Voting system for the first time, you will need to retrieve the ‘initial password’ which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the ‘initial password’ and the system will force you to change your password. c) How to retrieve your ‘initial password’? (i) If your email ID is registered in your demat account or with the Company, your ‘initial password’ is communicated to you on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf file. Open the .pdf file. The password to open the .pdf file is your 8 digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and your ‘initial password’. (ii) If your email ID is not registered, please follow the steps mentioned below: Process for those shareholders whose e-mail ids are not registered with the depositories for procuring user id and password for e-voting and for registration of e-mail ids: 1. In case shares are held in physical mode please provide Folio No., Name of shareholder, scanned copy of the share certificate (front and back), PAN (self-attested scanned copy of PAN card), by email to RTA, M/s DSRC on [email protected] 2. In case shares are held in demat mode, please provide DPID-CLID (16 digit DPID + CLID or 16 digit beneficiary ID), Name, client master or copy of Consolidated Account statement, PAN (self-attested scanned copy of PAN card), to RTA, M/s DSRC, email id: [email protected] Alternatively members may send an e-mail request to [email protected] for obtaining the User ID and Password by providing the details mentioned in Point (1) or (2) as the case may be. 6. If you are unable to retrieve or have not received the ‘Initial password’ or have forgotten your password: a) Click on “Forgot User Details/Password?” (If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com. b) “Physical User Reset Password?” (If you are holding shares in physical mode) option available on www.evoting.nsdl.com.
20 Bharat Petroleum Corporation Limited c) If you are still unable to get the password by the aforesaid two options, you can send a request at [email protected] mentioning your demat account number/folio number, your PAN, your name and your registered address. d) Members can also use the OTP (One Time Password) based login for casting the votes on the e-Voting system of NSDL. 7. After entering your password, tick on Agree to “Terms and Conditions” by selecting on the check box. 8. Now, you will have to click on the “Login” button. 9. After you click on the “Login” button, the Home page of e-Voting will open. Details on Step 2 are given below: How to cast your vote electronically on the NSDL e-Voting system? 1. After successful login at Step 1, you will be able to see the Home page of e-Voting. Click on e-Voting. Then, click on Active Voting Cycles. 2. After clicking on Active Voting Cycles, you will be able to see all the companies “EVEN” in which you are holding shares and whose voting cycle is in active status. 3. Select “EVEN” of company for which you wish to cast your vote. 4. Now you are ready for e-Voting as the Voting page opens. 5. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish to cast your vote and click on “Submit” and also “Confirm” when prompted. 6. Upon confirmation, the message “Vote cast successfully” will be displayed. 7. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page. 8. Once you confirm your vote on the Resolution, you will not be allowed to modify your vote. General Guidelines for Shareholders 1. Corporate/Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) intending to authorize their representatives to participate and vote at the Meeting are required to send a scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc., to the Scrutinizer by e-mail to [email protected] with a copy marked to [email protected] or upload on the VC portal / e-voting portal. 2. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the “Forgot User Details/Password?” or “Physical User Reset Password?” option available on www.evoting.nsdl.com to reset the password. 3. In case of any queries, you may refer to the Frequently Asked Questions (FAQs) for Shareholders and e-voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on the toll free no.: 1800-222-990 or send a request to NSDL at [email protected] or to Ms. Pallavi Mhatre, Manager, NSDL, 4th Floor, ‘A’ Wing, Trade World, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400013. Email: [email protected], Tel: 91 22 2499 4545 Instructions for Members for attending the AGM through VC/OAVM are as under :- 1. The Member will be provided with a facility to attend the AGM through VC/OAVM through the NSDL e-Voting system. Members may access the same at https://www.evoting.nsdl.com under the Shareholders/Members login by using the remote e-voting credentials. The link for VC/OAVM will be available in the Shareholders/ Members login where the EVEN of the Company will be displayed. Please note that the Members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned in the Notice to avoid last minute rush. Further, Members can also use the OTP based login for logging into the e-Voting system of NSDL.
Annual Report 2019-20 21 2. Members are encouraged to join the Meeting through Laptops for a better experience. 3. Further Members will be required to allow the camera and use the internet with good speed to avoid any disturbance during the meeting. 4. Please note that participants connecting from Mobile Devices or Tablets or through Laptops connecting via Mobile Hotspot may experience audio/video loss due to fluctuation in their respective network. It is therefore recommended to use a stable wifi or LAN connection to mitigate any kind of aforesaid glitches. 5. The Members who would like to express their views/have questions may pre-register themselves as a speaker, by sending their request from their registered email address mentioning their name, DPID and Client ID /folio number, PAN, email id, and mobile number at [email protected] from Sunday, 20th September 2020 to, Wednesday, 23rd September, 2020. Only those Members who have pre-registered themselves as a speaker will be allowed to express their views/ask questions during the AGM. The Company reserves the right to restrict the number of questions and number of speakers, depending upon availability of time as appropriate for smooth conduct of the AGM. The Members who need technical assistance w.r.t. VC/OAVM before or during the AGM, can contact NSDL on [email protected]/1800-222-990 or contact Mr. Amit Vishal, Senior Manager, National Securities Depository Ltd., located at ‘A’ Wing, Trade World, Kamla Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400013 on [email protected] /022-24994360. The Instructions for members for e-Voting on the day of the AGM are as under:- 1. The procedure for e-Voting on the day of the AGM is the same as the instructions mentioned above for remote e-voting. 2. Only those Members/ Shareholders, who will be present in the AGM through VC/OAVM facility and have not cast their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through the e-Voting system in the AGM. 3. Members who have voted through Remote e-Voting will be eligible to attend and participate at the AGM. However, they will not be eligible to vote at the AGM. 4. The Members who need technical assistance w.r.t. e-voting before or during the AGM, can contact Ms. Pallavi Mhatre, Manager, NSDL, 4th Floor, ‘A’ Wing, Trade World, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400013. Email: [email protected] / [email protected], Tel: 91 22 2499 4545/ 1800-222- 990. Kindly quote your name, DP ID-Client ID / Folio no. and E-voting Event Number in all your communications. Other Instructions: i) You can also update your mobile number and email id in the user profile details of the folio which may be used for sending future communication. ii) The Members holding shares in electronic form are therefore requested to submit the Permanent Account Number (PAN) details to their Depository Participants (DP) with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company or to Data Software Research Company Private Limited (DSRC), Registrar and Share Transfer Agent of the Company. iii) The voting rights of Members shall be in proportion to their shares in the paid up equity share capital of the Company as on the cut-off date i.e. Monday, 21st September, 2020. A person whose name is recorded in the register of Members or in the register of Beneficial Owners maintained by the Depositories as on the cut-off date i.e. Monday, 21st September, 2020 only shall be entitled to avail of the facility of remote e-voting at the Annual General Meeting. A person who is not a Member as on the cut-off date, should treat the Notice for information purpose only. iv) Any person who acquires shares of the Company and becomes a Member of the Company after dispatch of the Notice and holding shares as on the cut-off date i.e. Monday, 21st September, 2020, may obtain the login ID and password by sending a request at [email protected] or [email protected]. v) Once the vote on a resolution is cast by a member, whether partially or otherwise, the member shall not be allowed to change it subsequently or cast the vote again.
22 Bharat Petroleum Corporation Limited vi) Shri Bhumitra V. Dholakia, Designated Partner (C.P. No. 507) and in his absence, Shri Nrupang B. Dholakia, Designated Partner (C.P. No.12884) from Dholakia & Associates LLP, Practising Company Secretaries has been appointed as the Scrutinizer to scrutinize the voting and remote e-voting process in a fair and transparent manner. vii) The Chairman shall, at the end of the discussion on the Resolutions on which voting is to be held, allow voting with the assistance of the Scrutinizer, by use of e-voting for all those Members who have not cast their votes by availing the remote e-voting facility. viii) The Scrutinizer will, within fifteen minutes after the conclusion of voting at the Annual General Meeting, first unblock the votes cast through remote e-voting and shall make available, not later than forty eight hours of conclusion of the meeting, a Consolidated Scrutinizer’s Report of the total votes cast in favour of, or against, if any, to the Chairman or a person authorized by him in writing who shall countersign the same and declare the results of voting. ix) The results declared along with the Report of the Scrutinizer shall be placed on the Company’s website www.bharatpetroleum.in and on the website of NSDL www.evoting.nsdl.com immediately after the result is declared. The Company shall simultaneously forward the results to BSE Limited and National Stock Exchange of India Limited, where the shares of the Company are listed. ANNEXURE TO THE NOTICE Explanatory Statement Pursuant to Section 102 of the Companies Act, 2013 Item No.5: Appointment of Shri Rajesh Aggarwal as Director Shri Rajesh Aggarwal was appointed as an Additional Director on the Board upon nomination by the Government of India as Part-time (Government) Director, under the provisions of Article 77A of the Articles of Association of the Company read with Section 161 of the Companies Act, 2013, effective 8th January, 2020, in accordance with the directions of the Government of India. Shri Rajesh Aggarwal, being an Additional Director, holds office up to the date of the ensuing Annual General Meeting. The Company has received a Notice in writing, along with the deposit of requisite amount, under Section 160 of the Companies Act, 2013 proposing his candidature. Shri Rajesh Aggarwal is a senior IAS officer and holds the post of Additional Secretary & Financial Advisor in Ministry of Petroleum & Natural Gas (MoP&NG) and Ministry of Corporate Affairs, Government of India. He holds a degree of B. Tech in Computer Science & Engineering from IIT, Delhi. His brief resume containing his age, qualifications, expertise etc. is annexed herewith. The Board of Directors, accordingly, recommends the passing of the proposed Ordinary Resolution as contained in Item No. 5 of the Notice by Members of the Company. Shri Rajesh Aggarwal is interested in the Resolution to the extent as it concerns his appointment. None of the other Directors or Key Managerial Personnel or their relatives have any concern or interest, financial or otherwise, in passing of the said Ordinary Resolution. Item No.6: Approval of Remuneration of the Cost Auditors for the Financial Year 2020-21 With the completion of cost audit for the financial year 2019-20, both existing Cost Auditors (M/s. ABK & Associates, Cost Accountants and M/s. Bandyopadhyaya Bhaumik & Co., Cost Accountants) have completed 4 years of cost audit. Hence, appointment of new Cost Auditors for the Financial Year 2020-21 in place of existing Cost Auditors was considered. The Board had approved the appointment and remuneration of M/s. R. Nanabhoy & Co., Cost Accountants and M/s G.R. Kulkarni & Associates, Cost Accountants as the Cost Auditors on 14th May, 2020 to conduct the audit of the Cost records for the Financial Year 2020-21. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, ratification for the remuneration payable to the Cost Auditors for the Financial Year 2020-21 by way of an Ordinary Resolution is being sought from the Members as set out at Item No. 6 of the Notice.
Annual Report 2019-20 23 The Board of Directors accordingly recommends the passing of the proposed Ordinary Resolution for approval by the Members. None of the Directors or Key Managerial Personnel of the Company or their relatives have any concern or interest, financially or otherwise in passing of the said Ordinary Resolution. Item No.7: Approval of Material Related Party Transactions Bharat Oman Refineries Limited (BORL) was incorporated by Bharat Petroleum Corporation Limited and Oman Oil Company. The present shareholding of the Company as on 31st March, 2020 is 63.38%. BORL is a related party within the meaning of Section 2(76) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulations”). In terms of the Regulations, the contracts, arrangements and transactions relating to transfer or receipt of products, goods, materials, services, other resources and obligations with BORL are material in nature, since the transactions entered into or to be entered into individually or taken together with previous transactions during the financial year exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company. Accordingly, an Ordinary Resolution is proposed for adoption regarding the contracts, arrangements and transactions with BORL and the related parties shall abstain from voting on such a Resolution. The particulars of contracts, arrangements and transactions are as under: (a) Name of the Related Party: Bharat Oman Refineries Limited (BORL) (b) Name of the Director or Key Managerial Personnel (KMP) who is related: None (other than Shri Neelakantapillai Vijayagopal to the extent of being common Board member and nominee Director of BPCL). (c) Nature of relationship: Bharat Oman Refineries Limited (BORL) is a group company of Bharat Petroleum Corporation Limited (BPCL). (d) Nature, Material Terms of contracts, arrangements and transactions: purchase of products - Crude oil, MS, HSD, LPG, Naphtha, SKO, ATF, project materials etc.; sale of goods - Crude oil, lubricants etc; interest income on loans; rendering/receiving of services; canalising commission, demurrage, port charges, employee deputation, lease rental etc. (e) Monetary value: The actual value of material transactions falling under Regulation 23(1) of the Listing Regulations for the Financial Year 2019-20 was ` 45,650.11/- Crores. The estimated value of material transactions falling under Regulation 23(1) of the Listing Regulations for the Financial Year 2020-21 is ` 52,962.23/- Crores. Ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company for the Financial Year 2019-20 is ` 32,979.71/- Crores. The annual material related party transactions exceed / may exceed ten percent of the annual consolidated turnover of the Company as per the latest audited financial statements of the Company for the respective Financial Years based on the subsisting contracts, arrangements and transactions entered into or to be entered into; (f) Any other information relevant or important for the Members to make a decision on a proposed transaction: Transactions entered into on arm’s length basis and in the ordinary course of business. The Board of Directors, accordingly, recommends the passing of the proposed Ordinary Resolution as contained in Item No. 7 of the Notice by Members of the Company. The Directors or Key Managerial Personnel or their relatives, except as stated in (b), do not have any concern or interest, financial or otherwise, in passing of the said Ordinary Resolution. Item No. 8 : Approval of ‘BPCL Employee Stock Purchase Scheme 2020’ and Item No. 9: Approval of offer of shares under the ‘BPCL Employee Stock Purchase Scheme 2020’ to the Executive/ Whole-time Director(s) of Subsidiary Company(ies) who are on lien with the Company With the proposal of the Government of India for strategic disinvestment of its entire shareholding in the Company along with transfer of management control to the investor, the Company intends to implement an employee share based benefits scheme with the objectives of: a) Rewarding eligible employees, in due recognition of their association and loyalty with the Company;
24 Bharat Petroleum Corporation Limited b) Enabling eligible employees to become co-owners, seeking alignment of their interest with that of members of the Company; and c) Providing a share to such eligible employees in the value created in the Company over a period of time, as well as to give them an opportunity to reap value out of corporate growth in future. Given the objectives, the Company proposes to implement an employee stock purchase scheme, namely the ‘BPCL Employee Stock Purchase Scheme 2020’ (“ESPS 2020”/ “Scheme”), contemplating to offer for purchase equity shares of the Company, which in aggregate for all eligible employees taken together shall not exceed 4,33,85,000 (Four Crores Thirty Three Lakhs Eighty Five Thousand) fully paid-up equity shares (“Shares”) of face value of ` 10 (Rupees Ten) each. These Shares are proposed to be procured by way of secondary acquisition through an employee welfare trust, namely ‘BPCL ESPS Trust’ (“Trust”) which shall also be instrumental in the general administration of the Scheme. The quantum of Shares specified above is within the statutory ceiling of 2% (two percent) of the paid-up equity share capital of the Company as at the end of the financial year immediately prior to the year in which member’s approval is sought for secondary acquisition of Shares of the Company. The Trust shall purchase the aforesaid Shares from the ‘BPCL Trust for Investment in Shares’ (“BPCL Investment Trust”), subject to prevailing market conditions, through the stock exchange mechanism as per the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, (“SEBI SBEB Regulations”). Thus, the implementation of the Scheme shall not result in any further equity dilution of the existing shareholders. The Company shall provide necessary financial assistance by grant of a loan, provision of guarantee or security in connection with a loan to the Trust, by such sum of money which shall not exceed the ceiling, as contemplated under Regulation 3(8) of the SEBI SBEB Regulations read with Rule 16(1)(d) of the Companies (Share Capital and Debentures) Rules, 2014. In terms of Section 62(1)(b) of the Companies Act, 2013 read with Regulation 6 of the SEBI SBEB Regulations, the Company seeks your approval for implementation of the Scheme and offer Shares thereunder to the eligible employees. Subject to your approval and approval from any other authorities, if any, the Board of the Directors of the Company and its empowered committee, vide their respective meetings held on 4th September, 2020 have approved the proposed Scheme, features of which are specified under : (a) Brief description of the Scheme: The proposed Scheme seeks to reward eligible employees by way of offer of Shares at a discount, with a view to reward their association and loyalty which has resulted in corporate growth and value creation over a long period of time. The Scheme shall also be instrumental in making such eligible employees as co-owners with a mandatory lock-in period in respect of Shares offered to them, which would motivate them for ensuring higher corporate growth and creation of value for all stakeholders. The Company shall issue the offer of purchase of Shares to the eligible employees, which may be accepted by them within the offer period. Upon acceptance of the offer, the eligible employees shall be required to make payment of the purchase price and applicable taxes within the payment window, after which the Trust shall transfer Shares to the eligible employees. The eligible employees shall have a right to sell the Shares offered under the Scheme only after expiry of the mandatory lock-in period. The Nomination and Remuneration Committee or any other empowered committee of the Board of Directors of the Company, as constituted or reconstituted, shall act as the Compensation Committee (“Committee”) for the superintendence of the Scheme; whereas the Trust shall undertake the general administration of the Scheme. All questions of interpretation of the Scheme shall be determined by the Committee and such determination shall be final and binding upon all persons having an interest in the Scheme. (b) Total number of Shares to be granted: 4,33,85,000 (Four Crores Thirty Three Lakhs Eighty Five Thousand) Shares of the Company having face value of ` 10 (Rupees Ten) each fully paid-up would be available for offer under the Scheme, which shall be acquired by the Trust from secondary acquisition.
Annual Report 2019-20 25 As per the SEBI SBEB Regulations, in case of any corporate action(s) such as sub division, consolidation of Shares, rights issues, bonus issues, reorganization of capital structure of the Company and others, the Committee shall adjust the number of Shares available for offer and purchase price payable by the eligible employees in such a manner that the total value of Shares available for offer remain the same after any such corporate action(s). (c) Identification of classes of employees entitled to participate in the Scheme: The following classes of employees (“Employees”), subject to their selection as per eligibility criteria, shall be entitled to participate in the Scheme: a) a permanent employee of the Company including those on deputation to the Subsidiary Company(ies), Joint Ventures, Petroleum Planning and Analysis Cell (PPAC) etc. working in India or out of India as on the offer date; b) Executive or Whole-time Director/s of the Company as on offer date; and c) Executive or Whole-time Director/s of the Subsidiary Company(ies) as on offer date, who are on lien with the Company. However, the following personnel shall not be eligible: a) an employee who is a promoter or belongs to the promoter group; b) a Director who, either by himself or through his relatives or through any body corporate, directly or indirectly, holds more than 10% of the outstanding equity shares of the Company; c) all those who are on cessation/suspension immediately prior to the offer date; and d) any other person(s) as determined by the Committee from time to time. (d) Appraisal process for determining the eligibility of employees under the Scheme: Employees who have completed 5 (five) years of continued employment or service in the Company and / or employment or service in the Subsidiary Company(ies) who are on lien with the company, as on offer date are eligible under the scheme. The quantum of Shares will vary depending on the designation, level and grade. (e) Mandatory lock-in period under the Scheme: Shares transferred by the Trust under the Scheme shall be subject to a mandatory lock-in period of 1 (One) year from the date of transfer of such Shares. The Employees shall not be allowed to transfer, sell, hypothecate, create any charge or alienate in any other form during this lock-in period. (f) Offer period, payment window and the process of purchase of Shares: Once the offer is made, the eligible Employees who intend to purchase the Shares shall be required to accept such offer within the offer period or the extended offer period, as the case may be. The offer shall lapse and shall be cancelled in case an eligible Employee fails to submit the acceptance of the offer before the closure of the offer period or extended offer period. The eligible Employees shall submit the acceptance of the offer along with an application for purchase of Shares to the Trust in such form as may be prescribed. After submission of acceptance of offer, the eligible Employees are required to make payment of the purchase price along with applicable taxes within the payment window for obtaining the Shares under offer. The Trust, after verifying the requisite details, shall proceed to transfer the Shares. The commencement and closure dates of offer period, extended offer period and payment window, respectively, as decided by the Board, shall be specified in the offer letter to be issued to the eligible Employees. (g) Purchase price or pricing formula: The purchase price per Share shall be determined as per the following formula: i. For eligible Employees who will accept the offer within the offer period, it shall not be lesser than 33.33% (Thirty Three Point Thirty Three Percent) of the Market Price prevailing as on the offer date or purchase date, whichever is lower; and
26 Bharat Petroleum Corporation Limited ii. For eligible Employees who will accept the offer after the expiry of the offer period but within the extended offer period, shall not be lesser than 66.67% (Sixty Six Point Six Seven Percent) of the Market Price prevailing as on the offer date or purchase date, whichever is lower. Market price for determination of the purchase price shall be the average of the closing market price of the Share on the recognised Stock Exchange having higher trading volume during 180 (One Hundred and Eighty) days immediately preceding the offer date or purchase date, as the case may be. (h) Maximum number of Shares to be offered per Employee and in aggregate: The entitlement per Employee under one offer and in aggregate under the Scheme shall not exceed 9,000 (Nine Thousand) Shares. (i) Maximum quantum of benefits to be provided per employee under the Scheme: The Scheme does not contemplate any benefit other than offering Shares. In this context, the maximum benefit shall be the maximum number of Shares that can be offered as stated above. (j) Whether the Scheme is to be implemented and administered directly by the Company or through a trust: The Scheme shall be implemented and administered through the Trust. (k) Source of acquisition of shares for the implementation of the Scheme: The Scheme contemplates purchase of Shares through the Trust from secondary acquisition. The Trust shall purchase the Shares from the ‘BPCL Investment Trust’ through the stock exchange mechanism, in accordance with provisions of the SEBI SBEB Regulations. (l) Amount of loan to be provided for implementation of the Scheme by the Company to the Trust, its tenure, utilisation, repayment terms etc.: The Company shall provide necessary financial assistance by grant of loan, provision of guarantee or security in connection with a loan to the Trust by such sum of money not exceeding the ceiling as contemplated under Rule 16(1)(d) of the Companies (Share Capital and Debentures) Rules, 2014. The loan amount may be disbursed in one or more tranches. The loan shall be interest free with the term of the loan based on the term of the Scheme, unless repaid earlier. The loan shall be repayable to, and recoverable by, the Company from time to time, subject to realization of proceeds by the Trust upon sale/ transfer of Shares. The Trust shall utilise the loan amount disbursed from time to time strictly for the purchase of Shares to be utilized for the purpose of the Scheme. (m) Maximum percentage of Secondary Acquisition that can be made by the Trust for the purchase of the Shares: The Scheme envisages that the total number of shares to be purchased by way of secondary acquisition shall not exceed 2% (two percent) of the paid-up equity share capital of the Company as at the end of the financial year immediately prior to the year in which member’s approval is obtained for secondary acquisition of Shares, which is the statutory ceiling prescribed under the SEBI SBEB Regulations. (n) Accounting and Disclosure Policies: The Company shall follow ‘IND AS 102- Accounting for Employee Share-based Payments’ and/or any relevant Accounting Standards as may be prescribed by the competent authorities from time to time, including the disclosure requirements prescribed therein in compliance of Regulation 15 of the SEBI SBEB Regulations. Consent of the members is being sought pursuant to Section 62(1)(b) and all other applicable provisions, if any, of the Companies Act, 2013 read with Regulation 6 of the SEBI SBEB Regulations. None of the Directors or Key Managerial Personnel of the Company or their relatives are interested or concerned in the resolution, except to the extent of their entitlements, if any, under the Scheme.
Annual Report 2019-20 27 A copy of the Scheme is available for inspection electronically during official hours on all working days till the conclusion of voting. The Board of Directors recommends the passing of the proposed Special Resolutions nos. 8 and 9 as contained in the Notice by Members of the Company. Item No. 10: Approval of secondary acquisition of shares through the Trust route for the implementation of the ‘BPCL Employee Stock Purchase Scheme 2020’ The Company intends to implement the ‘BPCL Employee Stock Purchase Scheme 2020’ (“ESPS 2020”/ “Scheme”) with a view to reward eligible employees as a recognition of their association/ loyalty and their role in corporate growth. The Scheme seeks to reserve a total of 4,33,85,000 (Four Crores Thirty Three Lakhs Eighty Five Thousand) fully paid-up equity shares (“Shares”) of the Company of face value of ` 10 (Rupees Ten) each to be purchased through secondary acquisition by the ‘BPCL ESPS Trust’ (“Trust”) to be set up by the Company, which is within the statutory ceiling of 2% (two percent) of the paid-up equity share capital of the Company as at the end of the financial year immediately prior to the year in which member’s approval is obtained for such secondary acquisition of Shares of the Company that can be purchased in any one financial year as per the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (“SEBI SBEB Regulations”). The Trust shall acquire these Shares, in one or more tranches and from time to time, from the ‘BPCL Investment Trust’ through the Stock Exchange mechanism. The Trust shall not deal in derivatives and shall undertake only delivery based transactions for the purpose of secondary acquisition and for the purpose of the Scheme. The Trustees of the Trust shall ensure compliance of all the relevant provisions made under the SEBI SBEB Regulations read with the Companies Act, 2013 at all times, in connection with acquisition and dealing in the Shares of the Company including, but not limited to, maintenance of proper books of accounts, records and documents along with appropriate disclosures as prescribed. Subject to your approval and approval of any other authorities, if any, the Board of the Directors of the Company and its empowered committee, vide their respective meetings held on 4th September, 2020 have approved this proposal for use of Shares from secondary acquisition for the purposes of the Scheme. Consent of the members is being sought by way of a Special Resolution pursuant to Regulation 6(3) of the SEBI SBEB Regulations. None of the Directors or Key Managerial Personnel of the Company or their relatives are interested or concerned in the Resolution, except to the extent they may be lawfully offered Shares under the Scheme. The Board of Directors recommends the passing of the proposed Special Resolution no. 10 as contained in the Notice by Members of the Company. Item No. 11: Provision of money by the Company for purchase of its own shares by the Trust for the benefit of employees under the ‘BPCL Employee Stock Purchase Scheme 2020’. The Company intends to implement the ‘BPCL Employee Stock Purchase Scheme 2020’ (“ESPS 2020”/ “Scheme”) with a view to reward and share the value created over a period of time in the Company with its eligible employees. The Scheme envisages use of not exceeding 4,33,85,000 (Four Crores Thirty Three Lakhs Eighty Five Thousand) fully paid-up equity shares (“Shares”) of the Company of face value of ` 10 (Rupees Ten) each to be purchased by way of secondary acquisition by the ‘BPCL ESPS Trust’. As per the extant Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (“SEBI SBEB Regulations”), any scheme envisaging purchase of Shares by way of secondary acquisition mandatorily requires a trust route. Accordingly, the Board of Directors of the Company, vide its Resolution passed at the meeting held on 4th September 2020 has accorded its approval to set up the ‘BPCL ESPS Trust’ (“Trust”) with a view to implement the Scheme through this Trust. This Trust shall require loan/ financial assistance for acquisition of Shares for implementation of the Scheme. The loan may be disbursed in one or more tranches, from time to time, as per the requirement placed by the Trust. The total outstanding disbursal of loan at any time shall not exceed by such sum of money as contemplated
28 Bharat Petroleum Corporation Limited under Regulation 3(8) of the SEBI SBEB Regulations read with Rule 16(1)(d) of the Companies (Share Capital and Debentures) Rules, 2014 (“Companies Rules”). Necessary details in this regard are provided as under: a) The class of employees for whose benefit the Scheme is being implemented and money is being provided for purchase of Shares: The following employees who have completed 5 (five) years of continued employment or service in the Company and/ or the Subsidiary Company(ies) with a lien on BPCL employment as on offer date shall be eligible under the Scheme for whose benefit the Scheme is being implemented and money is being provided for purchase of the shares: i) a permanent employee of the Company including those on deputation to the Subsidiary Company(ies), Joint Ventures, Petroleum Planning and Analysis Cell (PPAC) etc. working in India or out of India as on the offer date; ii) Executive or Whole-time Director/s of the Company as on offer date; and iii) Executive or Whole-time Director/s of the Subsidiary Company(ies) as on offer date, who are on lien with the Company. However, the following personnel shall not be eligible: i) an employee who is a promoter or belongs to the promoter group; ii) a Director who, either by himself or through his relatives or through any body corporate, directly or indirectly, holds more than 10% of the outstanding equity shares of the Company; iii) all those who are on cessation/suspension immediately prior to the offer date; and iv) any other person(s) as determined by the Committee from time to time. b) The particulars of the Trustee or employees in whose favour such Shares are to be registered: It is contemplated that one or more of the designated Trustees shall acquire and hold the Shares of the Company in due compliance of the relevant provisions of Companies Rules. The Trustees shall transfer the Shares in favour of the eligible employees after realisation of purchase price and applicable taxes. c) The particulars of Trust and name, address, occupation and nationality of Trustees and their relationship with the Promoters, Directors or Key Managerial Personnel, if any: The Trust to be set up shall be in the nature of an irrevocable Trust with the name ‘BPCL ESPS Trust’ having its principal office at ‘Bharat Bhavan, P.B. No.688, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai – 400 001, Maharashtra’. Particulars of the Trustees who shall be appointed upon establishment of the Trust:
Sl. No. Name Address Occupation Nationality 1. Mr. P. V. Ravitej BPCL - Refinery, Mahul, Chembur, Company Executive Indian Mumbai – 400074, Maharashtra 2. Mr. G. Krishnakumar BPCL - Bharat Bhavan, 4 & 6 Company Executive Indian Currimbhoy Road,Ballard Estate, Mumbai – 400001, Maharashtra 3. Ms. Geeta Iyer BPCL - Bharat Bhavan, 4 & 6 Company Executive Indian Currimbhoy Road,Ballard Estate, Mumbai – 400001, Maharashtra The Trustees are neither Promoters, Directors nor Key Managerial Personnel of the Company, nor are they related to the Promoters, Directors or Key Managerial Personnel in their personal capacity.
Annual Report 2019-20 29 d) Any interest of Key Managerial Personnel, Directors or Promoters in such Scheme or Trust and effect thereof: The Promoters are not eligible to be covered under the Scheme. However, Key Managerial Personnel and Executive / Whole-time Directors will be covered under the Scheme in due compliance with the relevant Companies Rules read with SEBI SBEB Regulations. Any Key Managerial Personnel, Director or Promoter shall not have any interest in the Trust. e) The detailed particulars of benefits which will accrue to the employees from the implementation of the Scheme: The eligible employees shall be offered Shares under the Scheme with discount from the market price as on offer date or purchase date, whichever is lower. After acceptance of offer and payment of purchase price with applicable taxes, the Trust/ Trustees shall transfer the corresponding number of Shares to the eligible employees. The eligible employees would get the benefit on sale of Shares, depending on the sale price of such Shares. f) The details about who would exercise and how the voting rights in respect of the Shares to be purchased/ acquired under the Scheme would be exercised: The Trustees shall not vote in respect of Shares held in the Trust as per the extant SEBI SBEB Regulations. In this circumstance, the voting rights can be exercised by an eligible employee only when the Shares are transferred by the Trust to them. None of the directors or key managerial personnel of the Company or their relatives are interested or concerned in the Trust/ resolution, except to the extent of their entitlements, if any, under the Scheme. Consent of the members is being sought by way of a Special Resolution pursuant to Rule 16 of the Companies (Share Capital and Debentures) Rules, 2014 read with Regulation 3(8) of the SEBI SBEB Regulations. The Board of Directors recommends the passing of the proposed Special Resolution No.11 as contained in the Notice by Members of the Company. By Order of the Board of Directors
Sd/- (V. Kala) Company Secretary Place: Mumbai Date : 5th September, 2020 Registered Office Bharat Bhavan, P. B. No. 688, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai 400 001 CIN: L23220MH1952GOI008931 Phone: 2271 3000 / 4000 Fax: 2271 3874 email: [email protected] Website: www.bharatpetroleum.in
30 Bharat Petroleum Corporation Limited BRIEF RESUME OF DIRECTORS SEEKING APPOINTMENT/REAPPOINTMENT AT THE 67TH ANNUAL GENERAL MEETING IN TERMS OF REGULATION 36(3) OF LISTING REGULATIONS AND SECRETARIAL STANDARD – 2. Name Dr. K. Ellangovan Shri Rajesh Aggarwal Date of Birth 12th January 1962 12th November 1966 Date of first Appointment 20th March 2018 8th January 2020 Qualifications IAS, PhD from IIT, Madras, MS from IAS, B. Tech (Computer Science & Bangalore Medical College Engineering) IIT, Delhi Experience in specific He holds the position of Principal He is Additional Secretary and Financial functional areas Secretary, (Industries), Government Advisor, Ministry of Petroleum & Natural of Kerala. He was also Secretary, Gas and Ministry of Corporate Affairs, Department of Health and Family Welfare, Government of India. He has worked in Transport, Education, Government of Central Government as Joint Secretary, Kerala. During his 28 years of service, Department of Financial Services and he has held assignments in the Embassy Director, Jan Dhan Mission in of India in Abu Dhabi and Ministry of Tribal Affairs and Skill Development & Overseas Indian Affairs. He was earlier Entrepreneurship, and earlier as Director Executive Director, Council for Leather in Election Commission of India. In the Exports in the Ministry of Commerce & State Government of Maharashtra, he has Industry and District Collector, Palakkad. worked as IT Secretary and had various He has also held the post of Deputy other posts. He has earlier been on the Chairman, Ports in the Ministry of Boards of Punjab National Bank, IFCI Ltd., Shipping. CDAC, etc. He has also been Chairman & Managing Director of National Insurance Company Ltd. Directorship held in other Chairman: Director: Companies 1. Malabar Cements Ltd. 1. Oil and Natural Gas Corporation Ltd. 2. The Kerala Minerals and Metals Limited 2. Indian Strategic Petroleum Reserves 3. Nitta Gelatin India Ltd. Ltd. Director: 1. Kerala State Industrial Development Corporation Ltd. 2. INKEL Ltd. 3. Kottayam Port and Container Terminal Services Private Ltd. 4. Overseas Keralites Investment and Holding Ltd. 5. Norka-Roots (Sect 25 Company) Membership/ None Member: Chairmanships of Audit Audit Committee - BPCL and Stakeholders’ Relationship Committees No. of Board Meetings 13 4 attended during the financial year 2019-20 Relationship with other None None Directors & KMP No. of shares held in BPCL - -
Annual Report 2019-20 31 Directors’ Report
The Board of Directors takes pleasure in presenting 36.76 MMT during 2018-19. The BPCL Group ended the its Report on the performance of Bharat Petroleum year with Market Sales of 43.36 MMT, as compared to Corporation Limited (BPCL) for the year ended 43.30 MMT during 2018-19. During the year, the BPCL 31st March, 2020. Group exported 2.66 MMT of petroleum products, as against 1.99 MMT during 2018-19. PERFORMANCE OVERVIEW During this Financial Year, the Group achieved Gross Group Performance Revenue from Operations of ` 3,29,797.16 Crores, as During 2019-20, the aggregate refinery throughput of compared to ` 3,40,879.15 Crores in 2018-19. The Net BPCL’s Refineries at Mumbai and Kochi, along with Profit attributable to BPCL stood at ` 3,055.36 Crores in its Subsidiary Company, Numaligarh Refinery Limited 2019-20, as against ` 7,802.30 Crores in the previous (NRL) and considering 50% throughput of Joint Venture year. The Group has recorded Earnings per Share of Company Bharat Oman Refineries Limited (BORL), was ` 15.53 in the current year, as against ` 39.67 in 2018- 38.30 Million Metric Tonnes (MMT), as compared to 19 after setting off the Non-controlling interests.
CONSOLIDATED GROUP RESULTS 2019-20 2018-19 Physical Performance Refinery Throughput (MMT) 38.30 36.76 Market Sales (MMT) 43.36 43.30
Financial Performance ` in Crores Gross Revenue from Operations 329,797.16 3,40,879.15 Profit before Depreciation, Finance Costs, Exceptional Items and Tax 10,278.35 17,149.77 Finance Cost 2,637.01 1,763.95 Depreciation & Amortization expense 4,080.09 3,417.77 Share of profit of equity accounted investee (net of income tax) 1,400.67 937.32 Exceptional Items (Expense) 1,310.35 - Profit before Tax 3,651.57 12,905.37 Provision for Taxation – Current Tax 629.96 3,109.18 Provision for Taxation – Deferred Tax (14.49) 1,367.53 Short / (Excess) provision for Taxation for earlier years (629.68) (99.19) Net Profit for the year 3,665.78 8,527.85 Non-controlling interests 610.42 725.55 Net Profit attributable to BPCL 3,055.36 7,802.30 Other Comprehensive Income attributable to BPCL 599.84 (1,173.05) Total Comprehensive Income attributable to BPCL 3,655.20 6,629.25 Group Earnings per Share attributable to BPCL (`) 15.53 39.67
32 Bharat Petroleum Corporation Limited Company Standalone Performance as against 31.01 MMT achieved in 2018-19. The Market During the year 2019-20, the refinery throughput at Sales of the Company grew marginally by 0.07% to 43.10 BPCL’s Refineries at Mumbai and Kochi was 31.91 MMT, MMT in 2019-20, from 43.07 MMT in 2018-19.
COMPANY STANDALONE RESULTS 2019-20 2018-19 Physical Performance Refinery Throughput (MMT) 31.91 31.01 Market Sales (MMT) 43.10 43.07
Financial Performance ` in Crores Gross Revenue from Operations 327,580.78 3,37,622.53 Profit before Depreciation, Finance Costs, Exceptional Items and Tax 9,720.62 14,947.86 Finance Cost 2,181.86 1,318.96 Depreciation & Amortization expense 3,786.89 3,189.28 Profit before Exceptional Items and Tax 3,751.87 10,439.62 Exceptional Items (Expense) 1,080.83 - Profit before Tax 2,671.04 10,439.62 Provision for Taxation – Current Tax 201.00 2,079.00 Provision for Taxation – Deferred Tax 400.68 1,316.48 Short/(Excess) provision for taxation of earlier years (613.83) (87.88) Net Profit for the year (A) 2,683.19 7,132.02 Other Comprehensive Income (OCI) (497.99) (201.60) Total Comprehensive Income for the year 2,185.20 6,930.42 Opening Balance of Retained Earnings (B) 4,997.31 5,027.35 Amount available for disposal (A+B) 7,680.50 12,159.37 The Directors propose to appropriate this amount as under: Towards Dividend: Final Dividend of previous year 1,735.40 1,518.48 Dividend Distribution Tax on Final Dividend of previous year 327.54 287.98 Interim Dividend 3,579.27 2,386.18 Dividend Distribution Tax on Interim Dividend 595.89 359.97 Dividend Distribution Tax pertaining to previous years (4.45) - For transfer to Debenture Redemption Reserve 293.21 295.91 For transfer to General Reserve - 2,500.00 Income from BPCL Trust for Investment in Shares (495.81) (364.27) Re-measurements of Defined Benefit Plans (Net of tax) 185.06 138.02 For transfer to Deferred Income on account of implementation of Ind AS 115 - 39.79 (Net of Tax) Closing Balance of Retained Earnings 1,464.39 4,997.31 Summarized Cash Flow Statement : Cash Flows: Inflow/(Outflow) from Operating Activities 6,357.75 7,644.85 Inflow/(Outflow) from Investing Activities (9,263.97) (7,536.58) Inflow/(Outflow) from Financing Activities 2,940.22 (87.49) Net increase/(decrease) in cash & cash equivalents 34.00 20.78
Annual Report 2019-20 33 BPCL’s Gross Revenue from Operations for 2019-20 demand for crude oil and petroleum products affected stood at ` 3,27,580.78 Crores, reflecting a decrease of the prices and refining margins globally. Since petroleum 2.97% over the previous year’s revenues of ` 3,37,622.53 products are under essential services in India, the refining Crores. The Profit before Tax for the year was ` 2,671.04 and marketing operations of the Company continued Crores, as compared to ` 10,439.62 Crores in 2018-19. during the lock down period. However, due to the lock After providing for Tax, (including Deferred Tax, Short/ down and resultant reduction in economic activity, the (Excess) provision for previous years) of ` (12.15) revenue from operations of the Company were recorded Crores, as against ` 3,307.60 Crores during the last year, at lower levels. the Profit after Tax for the year stood at ` 2,683.19 Crores, as against ` 7,132.02 Crores in 2018-19. Profit for the The Company continues to operate all its major business current year is lower mainly due to significant decrease units, thus servicing its customers and meeting the in the refining margin coupled with depreciation of Indian demand of petroleum products in the country. Concurrent Rupee vis-a-vis the US dollar. Internal Generation after with gradual lifting of lockdown, demand for the products adjusting Dividends, Depreciation and Deferred Tax during have gone up and the Company is confident of further the year, was lower at ` 1,132.92 Crores, as against improvement in demand to normal levels, upon full ` 7,449.44 Crores in 2018-19, mainly due to lower Profit lifting up of the lockdown and stalibilisation of economic after Tax and higher distribution of Dividend. activity. We have assessed the potential impact of COVID-19 based on the current circumstances and we The Earnings per Share amounted to ` 13.64 in 2019-20, as compared to ` 36.26 in 2018-19. The Earnings per expect no significant adverse impact on the continuity of Share is after adjustment of BPCL Trust for Investment operations and business, on useful life of the assets, on in Shares. financial position, etc. on a long term basis, though there may be lower revenues and refinery throughput, which As per Regulation 43A of the Securities and Exchange may impact profitability in the near term. Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the top five hundred Dividend listed entities shall formulate a Dividend Distribution The Board of Directors has declared and distributed Policy. Accordingly, a Dividend Distribution Policy Interim Dividend of ` 16.50 per equity share (i.e. @ has been adopted to set out the parameters and 165% of the paid up share capital of ` 2,169.25 Crores) circumstances that will be taken into account by the totalling ` 4,175.16 Crores inclusive of ` 595.89 Crores Board in determining the distribution of Dividend to its for Dividend Distribution Tax during the year. The Board shareholders and/or retaining the profit into the business. of Directors has not recommended any Final Dividend for The policy is enclosed as Annexure J to the Board the Financial Year 2019-20. Report and is available on the Company’s website at Transfer to Reserves https://www.bharatpetroleum.com/about-bpcl/our- policies.aspx It is proposed to transfer ` 293.21 Crores to the Debenture Redemption Reserve out of the amount available in BPCL’s contribution to the exchequer by way of Taxes, Retained Earnings and transfer ` 377.40 crore from the Duties and Dividend during 2019-20 amounted to Debenture Redemption Reserve to the General Reserve ` 97,672.88 Crores, as against ` 95,035.24 Crores in the on redemption of Bonds. previous Financial Year. Disinvestment st As on 31 March, 2020, BPCL’s Total Equity stands at During the year, the Government of India disinvested ` 33,214.38 Crores, as against the previous year’s figure 69,12,370 equity shares in favour of Bharat 22 ETF of ` 36,737.68 Crores. (an exchange traded fund comprising of PSU stocks). MATERIAL CHANGES AND COMMITMENTS AFFECTING Consequently, the holding of the President of India in THE FINANCIAL POSITION OF THE COMPANY BETWEEN the equity share capital was reduced to 52.98% as at 31st March, 2020 from 53.29%. THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT The Government of India has on 20th November, 2019 accorded in-principle approval for strategic disinvestment Globally, the outbreak of COVID-19 resulted in lockdown of Government’s shareholding in BPCL excluding BPCL’s th in many countries, including India from 25 March shareholding in Numaligarh Refinery Limited (NRL). 2020, disrupting the economic activity and impacting Further, as per the above approval, BPCL’s shareholding the businesses across the world. Consequently, lower in NRL has to be divested to a Central Public Sector
34 Bharat Petroleum Corporation Limited Enterprise (CPSE) operating in Oil and Gas sector along C&AG Audit with transfer of management control. Action in this regard The Comptroller and Auditor General of India’s has been initiated. (C&AG) comment upon or supplement to the Statutory EMPLOYEE STOCK PURCHASE SCHEME (ESPS) Auditors’ Report on the Accounts for the year ended st The Company is proposing to introduce an Employee 31 March, 2020 is annexed as Annexure E. Stock Purchase Scheme during the ensuing year. The C&AG Audit on Other Matters: As at 31st March, 2020, scheme will be framed in accordance with the SEBI there are eight pending published paras related to the (Share Based Employee Benefits) Regulations, 2014 C&AG audit. These relate to extension of credit facility to (SEBI (SBEB) Regulations, 2014) and will be effective on a defaulter company, implementation of PAHAL (DBTL) approval of the scheme by the members of the company Scheme for LPG, unwarranted collection of delivery by way of a special resolution. In line with the SEBI charges from RGGLV consumers on sale of cylinders (SBEB) Regulations, 2014, for the implementation of the on cash and carry basis, payment of stagnation relief to scheme, it is proposed to form an ESPS Trust (“ESPS employees, payment towards encashment of employee Trust”). ESPS Trust shall purchase the shares required to leave together with employer’s share of EPF contribution, implement the scheme from the ‘BPCL Trust for investment payment of shift allowance to executives and payment to in shares’ by way of secondary acquisition through the employees on the occasion of completion of 40 years by stock exchanges as per SEBI (SBEB) Regulations, 2014 the Company and 50 years by Kochi Refinery, Employee and other applicable laws. The trustees of the ESPS trust, Long Service Awards in contravention of DPE Guidelines. which is governed by the SEBI (SBEB) Regulations, 2014 shall not vote in respect of the shares held by such trust, The audit objections have been suitably replied to and the so as to avoid any misuse arising out of exercising such same are under their review. voting rights. REFINERIES Borrowings During the year 2019-20, the refineries achieved excellent Total Borrowings of the Corporation as at 31st March, performance, registering an overall capacity utilization 2020 stood at ` 41,875.40 Crores (excluding lease of over 100%. The two refineries, Mumbai and Kochi, obligation as per Ind AS 116 “Lease” of ` 5,943.29 achieved the highest ever refinery throughput of 31.91 Crores), as against ` 29,099.30 Crores as at MMT, as against the previous best of 31.01 MMT last 31st March, 2019. year. BPCL achieved a Gross Refining Margin (GRM) for the year 2019-20 at USD 2.50 per barrel (` 4,182 Crores), Deposits from Public as compared to USD 4.58 per barrel (` 7,319 Crores) The Company has not accepted any deposit from the realized in the year 2018-19 due to depressed cracks public during the year. The amount of deposits, matured of High Speed Diesel (HSD), Jet Fuel/Kerosene, Fuel but unclaimed, at the end of the year were Nil. Oil and Naphtha. Persistent efforts in both the refineries Capital Expenditure helped to achieve significant reduction in Specific Energy Consumption to 66.0 Million British Thermal Unit per Capital Expenditure during the year, including investments barrels per Energy Factor (MBN) in 2019-20, as compared in Subsidiaries, JVCs and Associates amounted to to 68.6 MBN during the year 2018-19. ` 11,063.68 Crores, as compared to ` 10,393.53 Crores during the year 2018-19. The Capital Expenditure for the As per the International Maritime Organisation (IMO), year is including Right-of-Use assets of ` 913.95 Crores 2020 rules on maximum Sulphur content of 0.5 wt.% pertaining to leases of properties entered during the year in marine fuels and Government of India regulations as per Ind AS 116 “Leases”. on transportation fuels, the refineries had additional Operating Performance of Refineries Mumbai Refinery Kochi Refinery Parameters 2019-20 2018-19 2019-20 2018-19 Refinery Throughput (MMT) 15.14 14.78 16.77 16.23 Crude Oil Processed (MMT) 15.02 14.77 16.52 16.05 Capacity Utilization (%) * 125.17 123.08 106.58 103.54 GRM (USD/bbl) 2.88 4.92 2.17 4.27 GRM (in ` Crores) 2,321 3,816 1,861 3,503 *Capacity utilization is the percentage of the actual Crude oil processed to the installed (Design) capacity.
Annual Report 2019-20 35 challenges of producing 3 new upgraded products, Very Propylene Derivative Petrochemical Project (PDPP) at Low Sulphur Fuel Oil (VLSFO), BS-VI Motor Spirit (MS) Kochi Refinery and BS-VI High Speed Diesel (HSD). BPCL was the first The project envisages production of niche petrochemicals company to have successfully rolled out the supply of such as Acrylic Acid, Oxo Alcohols and Acrylates which BS-VI grade fuel across the country. The Gasoline are predominantly imported. The PDPP project marks Treatment Unit (GTU) was commissioned in Mumbai BPCL’s entry into production of niche petrochemicals Refinery (MR), which enabled the production of 100% utilizing Polymer Grade Propylene produced from the Petro BS-VI MS. Heat Traced Pipelines (HTPL) were FCCU set-up under the Integrated Refinery Expansion commissioned at MR and Kochi Refinery (KR) for the Project (IREP) at KR. The approved cost of the project is transportation of high pour products like High and Low ` 5,245.96 Crores and it is under commissioning. Sulphur Vacuum Residue, thereby adding value to the BS-VI Motor Spirit Block Project (MSBP) at Kochi Corporation. Refinery MARKETING KR is producing BS-VI MS & HSD since November 2019. During the year 2019-20, BPCL’s market sales volume The project is conceived to maximize BS-VI MS and to increased marginally by 0.07% to 43.10 MMT, as minimize Naphtha production at KR. The approved project compared to 43.07 MMT in the previous year. BPCL’s cost is ` 3,288.96 Crores. market share amongst public sector oil companies stood The physical progress is 91.50% as on 31.03.2020. The at 24.52% as at 31st March, 2020, as compared to 24.49% project is scheduled for completion in March 2021. as at the end of the previous year. Production of Polyols, Propylene Glycol and Mono A detailed discussion of the performance of the Marketing Ethylene Glycol at Kochi Refinery function is given in the Management Discussion & Analysis Report (MDA). The project envisages production of value added petrochemicals with high growth rate and demand such PIPELINES as Polyols, Propylene Glycol and Mono Ethylene Glycol BPCL owns a network of 2,241 kms of multi-product utilizing propylene and ethylene feed stock from Kochi pipelines, with design capacity of 17.84 Million Metric Refinery. The preliminary cost estimate for the project is Tonne Per Annum (MMTPA). approx. ` 11,130.00 Crores. In the year 2019-20, Pipelines achieved a throughput The licensors for all six units and the Project Management of 16.99 MMTPA of petroleum products (i.e. 10.76% Consultant have been finalized. The firmed up cost and increase over the previous year), keenly observing safe time schedule will be finalized after preparation of the operating procedures, nil fatality and nil lost time accident Front End Engineering Design (FEED). (LTA). Bina-Kota Pipeline & Cochin-Coimbatore-Karur 2G Ethanol Bio-refinery at Bargarh (Odisha) Pipeline achieved their highest ever annual throughput of 4.21 MMT and 4.00 MMT respectively during 2019-20. The project envisages setting up a Second Generation All product pipelines and tankages en-route locations have (2G) Bio-refinery to produce 100 Kilo Litres Per Day been successfully converted to BS-VI grade. Petrol and (KLPD) Ethanol using 400 Metric Tonne Per Day (MTPD) Diesel continue to be the major products that the Pipelines lignocellulosic Biomass as feedstock (rice straw / maize transport. In addition, Superior Kerosene Oil (SKO), stalk) using indigenous technology. The 2G Ethanol Aviation Turbine Fuel (ATF) and Liquefied Petroleum Gas produced will be used for blending in MS. The approved (LPG) are also transported through pipelines. cost of the project is ` 1,607.00 Crores. MAJOR PROJECTS The project has achieved overall physical progress of 20.10% as on 31.03.2020 and is scheduled for Gasoline Hydro Treatment Unit (GTU) at Mumbai completion in February 2022. Refinery LPG Import Facility at Haldia The project envisages installation of Gasoline Hydro Treatment Unit (GTU) at Mumbai Refinery to produce The project envisages setting up of a 1 MMTPA capacity 100% BS VI MS (Motor Spirit) in line with Government LPG Import Terminal at Haldia with twin pipelines (one mandate to produce 100% BS VI grade MS by for Butane & the other for Propane) from the Jetty to the 1st April 2020 as per Auto Fuel Vision and Policy 2025 at Terminal to meet the eastern region LPG demand. a cost of ` 554.00 crores. The project was completed in The approved cost of the project is ` 1,097.54 Crores June 2019 ahead of schedule. and it is under commissioning.
36 Bharat Petroleum Corporation Limited POL Terminal with Railway Siding at Pune The project has achieved overall physical progress The project envisages construction of a new rail fed POL of 31.20% as on 31.03.2020 and is scheduled for terminal at Pune with approximately 40 TKL storage completion in December 2021. tanks, 12 bay tank lorry gantry, full rake single spur Multiproduct Pipeline from Irugur to Devangonthi railway siding and associated firefighting facilities. The approved cost of the project is ` 282.64 Crores. The project envisages laying of a 294 Km long 16” dia multiproduct POL cross-country pipeline from Irugur The project has been completed in August 2020. (Tamil Nadu) to Devangonthi (Karnataka). The approved Coastal Terminal with Railway Siding at Krishnapatnam cost of the project is ` 1,472 Crores. The Project has The project envisages setting up of a coastal terminal achieved overall physical progress of 5.2% as on and railway siding at Krishnapatnam port. The approved 31.03.2020 and is scheduled for completion in August cost of the project is ` 580.20 Crores and it has achieved 2022. overall physical progress of 33.50% as on 31.03.2020. RESEARCH & DEVELOPMENT (R&D) Resitement of Raichur Depot to Gulbarga R&D plays a vital role in the Corporation to develop The old Raichur Depot is proposed to be resited to disruptive technologies and provide innovative solutions Gulbarga on revised safety considerations, and it will meet to customers and stakeholders. The R&D Centres of BPCL the market demand from a new location in Karnataka. The are involved in developing cutting edge technologies, approved cost of the project is ` 206.26 Crores. energy efficient robust processes, novel products and cleaner fuels to increase the Company’s profitability and The project has achieved overall physical progress reduce the environmental footprint. of 45.00% as on 31.03.2020 and is scheduled for completion in December 2020. The Corporate R&D Centre (CRDC) at Greater Noida, New POL Terminal at Radhanagar, Bokaro Uttar Pradesh and Product & Application Development Centre (P&AD) at Sewree, Mumbai are proactively The old Ranchi and Dhanbad Depots are proposed to be involved in creating tangible and intangible benefits resited to Radhanagar on revised safety considerations, through research activities. CRDC works in the areas and it will meet the future market demand from a new of catalyst development, biofuels, petrochemicals, location in Jharkhand. The approved cost of the project process development, modelling & simulation, crude is ` 248.55 Crores. oil characterization and compatibility, corrosion studies, The project has achieved overall physical progress residue upgradation, additive development and waste of 20.00% as on 31.03.2020 and is scheduled for utilization. completion in March 2022. P&AD is focusing on industrial lubricant formulation Mumbai Manmad Pipeline Re-routing development, technical services, quality assurance The project envisages laying of a 50 Km long 18” dia and the MAK Centre of Excellence. This R&D Centre is pipeline for rerouting of the Mumbai Manmad Pipeline actively involved in the latest research for developing section, construction of 3 Sectionalizing Valve stations lubricants based on frontier technologies. Key focus and associated facilities. The approved cost of the project areas have been development of new products, alternate is ` 449.58 Crores. formulations, conducting field trials and offering prompt technical service to customers and marketing functions. The project has achieved overall physical progress R&D has been actively associated with automotive majors of 89.10% as on 31.03.2020 and is scheduled for in the country for developing genuine oils meeting their completion in February 2021. stringent in-house tests and international specifications. Multiproduct Pipeline from Bina Dispatch Terminal to The benefits derived during the year 2019-20 due to POL Terminal at Kanpur research activities have been summarized in Annexure A. The project envisages laying of approx. 355 Km NON-CONVENTIONAL ENERGY multiproduct pipeline for a throughput of 3.5 MMTPA from Bina Dispatch Terminal to POL Terminal at Panki, BPCL is steadily increasing its Renewable Energy Kanpur for transporting MS, HSD & SKO, augmentation portfolio and moving towards generating more clean of tankage at Panki Terminal, Kanpur along with the energy. During the year 2019-20, BPCL commissioned railway loading siding. The approved cost of the project is 10 grid interactive solar plants in 5 installations / depots ` 1,524.06 Crores. and 5 LPG plants, adding a total capacity of 4.12 MW.
Annual Report 2019-20 37 BPCL is also installing hybrid solar plants in 18 Company provide vocational training to deserving youth and enhance owned large format retail outlets across India. These their employability / entrepreneurship, both in the Oil & Gas plants are under construction and are expected to be Industry as well as in other Industries. completed in the year 2020-21. These plants are being This state-of-the-art campus with all the latest gadgets developed as pilot projects, where rooftop solar plants and equipment provides the right ambience for skilling 180 with battery storage are being installed. youth at a time on a fully residential model for a total of Rooftop solar units were also installed in 974 retail outlets 1248 training hours spread across six months. Industrial in the year 2019-20, taking the number of total solarized electrician, welding, fitter- fabrication and process retail outlets to 2285. instrumentation are some of the courses conducted at INDUSTRIAL RELATIONS SDI, Kochi with M/s Nettur Technical Training Foundation (NTTF), Bangalore as the training partner. SDI Kochi has so During the year, the Industrial Relations climate was far trained and certified 755 students in 6 batches, since its cordial and harmonious across all locations despite two inception in December 2016. It has an excellent placement strikes. BPCL continued its thrust towards maintaining track record, having placed 95% of certified students in industrial harmony through continuous interface & leading companies in India and abroad. engagement with Unions and the SC/ST association with focus on increased communication, productivity Continuing aid to the neglected sections of society, BPCL enhancement and employee well-being. All organizational has supported a placement-linked Vocational Training and employee related issues were handled with a project for assimilating 792 leprosy-affected youth into collaborative approach and regular communication was mainstream society. With a variety of technical and non- ensured to all employees on all important issues affecting formal courses offered at these Vocational Training Centres, them and the Organization. The Unions and the workmen aspirants can choose to obtain qualification in trades such demonstrated their commitment to achieve organizational as motor mechanic, diesel mechanic, welder, computer objectives through partnering in the various processes. operator and programming assistant, stenographer, electrician, carpenter, tailor among others. CORPORATE SOCIAL RESPONSIBILITY In a similar programme which promotes self-employment, As a responsible corporate citizen, BPCL accords BPCL has skilled 940 individuals, mostly women, in tailoring significant importance to Corporate Social Responsibility and hand embroidery trades in the aspirational districts of (CSR) and it therefore forms a key part of the Company’s Shrawasti (UP) and Mewat (Haryana) with around 90% of overall vision touching the pulse of all, especially rural the beneficiaries placed/ earning basic livelihood from these & tribal India. Sustainability of the initiatives is the skills. prime motto, factoring in community needs and cultural sensitivities, in the core thrust areas of Skill Development, Education Education, Water Conservation, Health & Hygiene and Firm in the belief that children are the leaders of the future, Community Development. BPCL continues its commitment to education as one of Recognising its duty to the communities near and far its core areas of focus under CSR. Project Akshar, being from its businesses, BPCL has contributed in a large undertaken at Nandurbar in Maharashtra and Sagar in way to the relief and rehabilitation activities in the wake Madhya Pradesh, has transformed the way in which early- of the coronavirus pandemic, while also continuing its age education is perceived and imparted. More than 84,000 support to national missions like Swachh Bharat Abhiyan, children have directly benefitted from this program this year. Skill India and Transformation of Aspirational Districts Another such program in the education sector is the program, to name a few. ‘Computer Aided Learning’ (CAL) program, which aims at The Corporation relies on the strong partnerships it providing a level-playing field to children from economically has forged with the Government, credible not-for-profit disadvantaged communities, by helping in bridging the gap organisations and other agencies to bring the above of digital literacy between them and the society at large. mentioned quality interventions to the doorsteps of those This year, BPCL has continued with the 7th batch of its in need, across the nation. flagship Teacher Training Program– Saksham. This project Skill Development has prepared over 320 primary and upper primary teachers Aligning with our Hon’ble Prime Minister’s ‘Skill India and headmasters from 70 schools for the evolving education Campaign’, BPCL along with other oil companies has paradigm, by imparting knowledge on new techniques for promoted a Skill Development Institute (SDI) at Kochi to teaching and classroom management.
38 Bharat Petroleum Corporation Limited BPCL has also widely covered the infrastructural facet The Lifeline Express - “Hospital on a train” has contributed of education. One such project is carried out in Darrang in reducing the burden of avoidable disability in rural which is an aspirational district situated in the central part communities by early identification, screening and providing of Assam. 80 additional classrooms with allied facilities medical & surgical interventions to about 20000 patients in in 30 identified Government Primary Schools are being the districts of Araria (Bihar), Dhubri (Assam) and Papum constructed. They would facilitate an advantageous & safe Pare (Arunachal Pradesh). The whole train, comprising learning atmosphere for over 10,000 students, including nine compartments, is actually modified into a hospital and both boys and girls. it travels to interior parts of the country to serve the local people, for whom reaching hospitals is a big issue. A new hostel block with 165 rooms for women was constructed at the Indian Institute of Science (IISc), Paving the way for a healthy life, several Mobile Medical Bengaluru where some of the brightest women students Units catered largely to marginalized sections of society by and researchers from disadvantaged sections of the providing aids & appliances, performing cataract surgeries community, backward regions and far-flung areas across or strengthening health facilities by supporting procurement India are admitted. of medical equipment or through construction of additional facilities etc. Water Conservation The Company enthusiastically participated in ‘Swachh Water being one of the most essential elements for living, it Bharat Abhiyan’, the flagship movement of the Government has been one of the ongoing areas of focus for BPCL both of India and received top honours from MOP&NG for an within and beyond the fence. Through its water conservation outstanding performance during the Pakhwada in July. As initiatives, collectively named “BOOND”, BPCL has aimed part of the various Swachhta Pakhwadas, BPCL undertook at improving access to water for various needs including more than 80,000 activities within a narrow timespan of two drinking, agriculture and livelihood, household needs as months, combined with a total outreach of more than 10 well as for recharging ground water reserves. The Company lakhs people through various awareness initiatives. has taken up rejuvenation of urban water bodies as well as cleaning of semi-urban/rural water structures through BPCL constructed over 1400 toilets during the year which a balanced combination of direct intervention, involvement include community sanitation complexes, individual of local government, ‘Shramdaan’ by local community and household toilets and school sanitation complexes. The community engagement. Company undertook a bold step towards eliminating manual scavenging by providing robotic manhole cleaning machines In an effort to re-establish ecological balance and to M-Ward in Mumbai, Maharashtra. The Company has also biodiversity, BPCL undertook the cleaning of a 10 km continued in its support of Swachh Iconic Places projects stretch of the Ichamati river in Bengal along with the local at Kalady, Kerala - the birthplace of Shri Adi Sankaracharya administration of three panchayats. This initiative will help and Meenakshi Amman Temple at Madurai, Tamil Nadu. to reopen the scope for fishing, as well as provide water for cultivation and production of organic manure from the This year has seen one of the most challenging global vegetation removed from the river. health crises by way of the COVID-19 pandemic and BPCL has been right there on the front-line, be it through Health & Hygiene setting up ICUs for treating COVID-19 patients, providing of BPCL continues to contribute to the well-being of the country Personal Protective Equipment (PPE) kits to health workers, by reaching out to marginalised communities through the distribution of sanitizers and face masks to the general adoption of several quality health care initiatives that include public, as well as making available basic provisions to those both preventive and curative interventions. in need. Along with the entire oil and gas industry, BPCL has contributed in a big way to the PM CARES Fund for the relief The cancer care project in Darrang, an Aspirational District, and rehabilitation measures. entails the setting up of an affordable cancer care facility and ensuring access to cancer care, leading to early diagnosis Community Development and timely treatment that helps in improved survival rates The Company’s Community Development initiatives seek among patients. to empower individuals, groups of people and families With focus on cancer cure, one of BPCL’s major ongoing with the resources they need to effect change within their projects has been to support more than 450 underprivileged communities. BPCL has continued to support a mega and low income cancer patients towards holistic treatment project of integrated development of communities in the cost in six cancer hospitals across the country. district of Gadchiroli, situated in the south-eastern corner
Annual Report 2019-20 39 of Maharashtra which includes interventions on water the donation of blood, service in community kitchens and harvesting, safe drinking water, sustainable livelihood packing thousands of kits with provisions. Contribution program, establishment of libraries, central kitchen, treating towards nation building has always been the constant anaemic adolescent girls by providing fortified rice etc. endeavour of BPCL and we strive to take it to greater heights every day. The Annual Report on CSR activities in BPCL has participated in the “Transforming of Aspirational Districts Program”, working in various sectors such as skill the specified format is provided in Annexure B. development and community development along with a PROMOTION OF SPORTS special focus on healthcare, nutrition and school education. BPCL has also spread its coverage to the north-east by The year 2019-20 was quite an eventful year for BPCL initiating projects in the interior and difficult terrains of sportspersons, as they continued to excel in the national Meghalaya, Mizoram and Manipur. and international sports arena. Ace shuttler, Saina Nehwal continues to be amongst the best Badminton players with Mumbai Refinery has been contributing significantly to World Ranking of No.11. BPCL’s efforts in CSR through various programs around the refinery and pipelines. The quality education initiative of Para Badminton players, Manasi Joshi and Manoj Sarkar ‘Nanhi Kali’ at Palghar District provides 360-degree support performed exceedingly well at the Badminton World to underprivileged girls studying in government schools Championship held at Basel, Switzerland. Manasi became from Grades 1 to 10. Likewise the Company contributes to the World Champion and Manoj won the Bronze Medal. making hands-on science education available to children Ace Archer and Arjuna awardee V. Jyothi Surekha won and teachers through setting up Mini Science Centres in the Gold Medal in the Mix team & Silver Medal in the Team 20 Government Aided Schools. The Refinery is proactively event at the Asian Championship 2019 held at Bangkok, working to address issues of quality healthcare through Thailand. She also won 2 Bronze Medals in individual several activities like strengthening healthcare infrastructure and team events at the World Archery Championship in Government Hospitals, providing health insurance to the 2019 held at Netherlands. Archer Atanu Das won the underprivileged and conducting free cataract surgeries for Silver Medal in the same Team event and booked India’s the needy. position at the Tokyo 2020 Olympic Games. Recently Kochi Refinery reached out to people in the neighbourhood recruited Padma Shri Deepika Kumari also came up with and beyond, through a host of CSR activities in the a fabulous performance in the Asian Championship 2019 thrust areas of Education, Health, Skill Development and by winning several medals and also booking an individual Community Development, ranging from life-saving medical quota for India at the Tokyo 2020 Olympic Games. equipment to much required infrastructure support. The ‘Roshni’ Learning Enhancement Project is a major annual Newly recruited hockey player, Vivek Sagar Prasad was intervention for the children of guest workers. The First Meal awarded Young Promising Player for the year 2019-20 by project provides healthy and nutritious breakfast to school Federation of International Hockey (FIH). 7 of our Hockey students contributing to their health, intellectual capacity players viz. Harmanpreet Singh, Varun Kumar, Birendra and enrolment in schools. Lakra, Lalit Upadhyay, SV Sunil, Vivek Sagar Prasad and Dipsan Tirkey represented the country in several In addition to multi-specialty medical camps and support International hockey tournaments and are also part of to Palliative Care Centers, one of the recurring areas of the Indian Hockey Camp gearing up for the Tokyo 2020 focus for Kochi Refinery has been ‘Trauma Care’. Dedicated Olympic Games. Trauma Care Units have been completed at Ernakulam General Hospital and Koothuparambu Taluk Hospital in 5 of our Cricketers viz. Kuldeep Yadav, Manish Kannur District. Along the same lines, BPCL has contributed Pandey, Shreyas Iyer, Sanju Samson and Shivam Dube in making a Marine Ambulance available for helping the represented India in International tournaments. Kuldeep distressed at sea during calamities and emergencies. Yadav was part of the Indian Cricket team for the 2019 Cricket World Cup. As a part of employee engagement and volunteering, BPCL staff are actively involved in value-based storytelling and Our leading Chess player and Arjuna awardee P. conducting games to facilitate peer learning thus creating Harikrishna continues to be ranked amongst the best a positive environment. BPCL employees have volunteered players in the world. Arjuna awardee Abhijeet Gupta won in great numbers in the relief work during the flood and the Gold Medal in the Reykjavik Chess tournament and landslide affected-areas in 2019 while also being in the both Abhijeet and Harikrishna represented India in the frontline of service during the COVID-19 pandemic, through Chess World Cup 2019 held at Russia.
40 Bharat Petroleum Corporation Limited RESERVATION AND OTHER WELFARE MEASURES The Company has also put in a place an attractive FOR SCHEDULED CASTES/SCHEDULED TRIBES/ Hindi incentive scheme for employees to enhance and OTHER BACKWARD CLASSES AND PERSONS WITH encourage the usage of Hindi in the daily activities of DISABILITIES offices/locations. As a part of encouraging employees’ BPCL has been following in letter and spirit, the Presidential children for promoting Hindi, children were given Official Directives and other guidelines issued from time to time Language Prizes for scoring more than 60% marks in th th by Ministry of Petroleum & Natural Gas, Ministry of Social Hindi subject in class 10 and 12 . Hindi Training and Justice and Empowerment and the Department of Public Workshops on various topics were organized on an Enterprises relating to reservations / concessions for all India basis for imparting enhanced and important Scheduled Castes / Scheduled Tribes / Other Backward techniques of compliance. Classes. An adequate monitoring mechanism has been CITIZEN’S CHARTER, PUBLIC GRIEVANCE REDRESSAL put in place for sustained and effective compliance (PG) & CUSTOMER CARE SYSTEM (CCS) & RIGHT TO uniformly across the Company. Rosters are maintained as INFORMATION (RTI) per the Directives and are regularly inspected by Liaison BPCL constantly strives towards excellence by setting up Officer of the Company as well as the Liaison Officer of new benchmarks in customer service standards, thereby MOP&NG to ensure proper compliance of the directives. providing customers with an enriching experience. SC/ST and economically backward students are ‘Customer Centricity’ is a cardinal policy followed by encouraged by awarding scholarships to students BPCL; therefore, customers and their satisfaction are pursuing courses in Secondary School education upto essential aspects of its business process. graduation level. BPCL believes in focusing on the redressal of customer BPCL also complies with provisions under “The Persons complaints as a significant step to success. Consequently, with Disabilities (Equal Opportunities, Protection of Rights the Company has fixed standards at every touch point, and Full Participation), Act 1995 relating to providing encompassing the Citizen’s Charter, Public Grievance employment opportunities for Persons with Disabilities Redressal (PG) and Customer Care System (CCS). (PWDs). Details relating to representation of SC/ST/OBC/ Citizen’s Charter Economically Weaker Sections (EWS) candidates and Persons with Disabilities are enclosed as Annexure C. The Citizen’s Charter enshrines trust between BPCL and its customers. BPCL remains focused on providing IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY improved quality of services. The Citizen’s Charter BPCL continued to abide by the Annual Program 2019-20 published by BPCL, which is available on the Company’s issued by Department of Official Language, Ministry of Website, specifies customer rights with respect to Home Affairs, Government of India for diligent compliance standards, quality and time-frame for service delivery. towards implementation of Official Language across all This also provides insights into the range of products locations. BPCL locations and offices across the country and services offered to customers and gives an overview observed Hindi Fortnight/Week during the month of of the marketing activities of the Company, highlighting September, 2019 by organizing unique competitions, the policy guidelines and processes on marketing of cultural programs and educational seminars. Notable petroleum products. days, milestones, projects and pledges of national Public Grievance Redressal (PG) importance have also been celebrated and organized The Public Grievance Redressal framework in BPCL in Hindi. World Hindi Day was also observed on transcends across business units and is a well established 10th January, 2020 across all the offices of BPCL. online mechanism for receipt, escalation and timely and Various accolades have been received by the Company effective closure of all public complaints. The complaints for implementation of official language Hindi. Eastern resolution is continuously monitored from the Corporate Regional Office, Kolkata was conferred with the ‘Best Office through the Centralized Public Grievance Redress office’ amongst PSUs located in Kolkata under ‘C’ Region and Monitoring System (CPGRAMS). It is an online (as defined under Official Language Rules, 1976 framed web-enabled system, (https://www.pgportal.gov.in/), under the provisions of Sec 8(1) of the Official Languages developed by National Informatics Centre (NIC) and Act, 1963) for implementing Official Language by Town Department of Administrative Reforms and Public Official Language Implementation Committee, Kolkata. Grievances (DARPG).
Annual Report 2019-20 41 To ensure prompt and qualitative closure, the operation towards Digital India, a new process of receiving digitally takes place on a well-established online network. In the signed invoices and issuance of digitally signed Purchase year 2019-20, BPCL redressed and closed 5,243 out of Orders was introduced. BPCL procured goods worth 5,336 grievances, with an average disposal time of 13 ` 16 Crores through Government e-Marketplace (GeM), days, as opposed to the norm of 30 days disposal. up from ` 1 crore procured in the previous year. Customer Care System (CCS) BPCL fully abides by the Public Procurement Policy for MSEs Order 2012 and its amendment of November 2018. The Customer Care System (CCS) administered by BPCL All the high value tenders at BPCL were through the press is a centralized portal that enables customers to register tender route. The General Conditions of Contract (GCC) their suggestions, complaints and feedback. CCS ensures that customers’ queries get heard and addressed. Branded and General Purchase Conditions (GPC) of press tenders as “SmartLine”, CCS is equipped with a toll-free number have the purchase preference clause for MSEs. 1800 22 4344. “Ek Call, Sab Solve” is a one-stop solution During the year 2019-20, the procurement value for BPCL for customers to resolve their grievances. It has an inbuilt for Goods and Services, excluding Works Contracts, escalation matrix that allows tracking of every interaction. where MSEs could have participated was ` 8754.81 CCS also maintains a record of feedback from customers Crores and the actual procurement value from MSEs in order to provide assistance as well as enhance service was ` 2,585.36 Crores, i.e., an achievement of 29.53%, standards. which is more than the target of 25%. Right to Information (RTI) BPCL conducted a Vendor Development Program The RTI Act came into force effective 2005 and BPCL exclusively for MSE-SC/ST Vendors at Chennai, has effectively implemented the same from the beginning. wherein over 100 vendors participated. BPCL teams The Company complies with all the requirements of the participated in 9 Vendor Development Programs cum RTI Act, 2005. Along with the physical RTI applications, Exhibitions conducted by MSME-DI (Micro, Small and BPCL also receives online applications and addresses Medium Enterprises-Development Institute), National them through the unified RTI portal of the Government of Small Industries Corporation (NSIC) at Mumbai, Pune, India at www.rtionline.gov.in. Aurangabad, Delhi, etc. For better understanding, BPCL’s website, www.bharatpetroleum.in publishes a separate section BPCL offered Trades Receivable Discounting Scheme that is explicitly designated to RTI. Suo Motu disclosure (TReDS) to its MSE Vendors. This facility was availed by under section 4(1) (b) is updated regularly. MSE Vendors and over 1,940 invoices valued at ` 102 Crores were discounted. Officers from different business units and departments have been designated as Central Public Information VIGILANCE Officers (CPIOs) and First Appellate Authorities (FAAs) Vigilance in BPCL is committed to nurture and facilitate the to handle the RTI requests received from Indian citizens. highest level of ethical standards in the Organization. Team In order to effectively respond to the RTI queries and Vigilance focuses on proactive and preventive efforts to appeals addressed to BPCL, the Company currently has promote good governance and transparency in all business 49 CPIOs and 12 FAAs, who are positioned across the country, covering major Business Units like Retail, LPG, processes in the Organization. Aviation, Mumbai Refinery, Kochi Refinery, and Entities As a part of preventive vigilance activities, Vigilance like HR and International Trade. officials, during their visits to various locations, guided the BPCL received 4,052 RTI queries and 569 appeals in officers and staff on the relevant procedures and guidelines. the year 2019- 20. All the RTI queries and appeals were Further, surprise inspections were conducted at 158 replied on time. BPCL since 2005 has successfully locations, 238 retail outlets and 123 LPG distributorships handled 41,386 RTI applications, 5913 first appeals, from time to time during the year. Based on the outcome and 972 second appeals that were addressed to Central of these inspections, administrative actions and system Information Commission (CIC). improvements were initiated. Detailed inspections of major PUBLIC PROCUREMENT : MICRO & SMALL projects were also undertaken and observations with ENTERPRISES specific recommendations were made available to the concerned departments. During the year 2019-20, Central Procurement Organisation (Marketing) procured goods worth Vigilance Awareness Week with the theme ‘Integrity - ` 7,752 Crores (100% e-tendering). As an initiative a way of life’ was observed across the country from
42 Bharat Petroleum Corporation Limited 29th October to 3rd November, 2019. During the week, a Annual Reports/ audited accounts in respect of each of variety of programs were carried out across the country its Subsidiaries in its above website. A copy of the said to spread the theme and bring awareness amongst the documents will be available for inspection and provided stakeholders. to any shareholder of the Company who asks for it. In the knowledge gaining initiative, Team Vigilance The policy for determining material Subsidiaries is posted successfully participated in a 3 day certification program on the Company’s website at the link: https://www. on the subject of “Psychological Methods of Investigation” bharatpetroleum.com/about-bpcl/our-policies.aspx at the Gujarat Forensic Sciences University (GSFU), Gandhinagar, Gujarat. BPCL SUBSIDIARY COMPANIES NUMALIGARH REFINERY LIMITED (NRL) During the year, with the purpose of safeguarding the interests of stakeholders, Vigilance took timely action in NRL was incorporated in 1993 with an authorized share concluding complaints as per the guidelines provided by the capital of ` 1,000 Crores. As on 31st March, 2020, the Central Vigilance Commission. A summary of investigative authorised capital has been increased to ` 5,000 Crores. complaints handled by Vigilance during the Financial Year NRL is a Category I Mini Ratna CPSE and has a 3 MMTPA 2019-20 are given below:- refinery at Numaligarh in Assam. Besides the refinery, NRL has two marketing terminals, one at Numaligarh Opening Received Total Disposed Closing and the other at Siliguri for evacuation of product. NRL Balance during the during the Balance also has a 42 TMTPA LPG Bottling Plant at Numaligarh. (as on Year Year (as on 01.04.2019) 31.03.2020) The Company is going in for the capacity expansion 57 37 94 35 59 of Numaligarh Refinery from 3 MMTPA to 9 MMTPA. Government approvals for the same have been obtained The above complaints broadly cover issues like selection and necessary activities have started. Environment of Retail Outlet dealers, LPG Distributors and irregularities clearance for the project has been received in July 2020. in Retail Outlets/LPG Distributorships, lapses in the st tendering process, etc. As on 31 March, 2020, the paid up capital of NRL was ` 735.63 Crores, of which BPCL holds 61.65%. The tenth edition of the Vigilance magazine, ‘Vigilance During 2019-20, NRL crude throughput was 2.38 Plus’ was released. It had articles on good governance, MMT, as compared to 2.90 MMT in the previous year. ethics and values, experiences of individuals, poems and The Revenue from Operations (net of excise duty) was highlights of the activities conducted during the year. ` 12,045.23 Crores for the year ending 31st March, 2020, SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE as compared to ` 16,205.07 Crores in the previous COMPANIES year. The company’s consolidated profit after tax for the year stood at ` 1,533.45 Crores, as against profit of BPCL had 4 subsidiaries and 22 Joint Venture Companies ` 1,980.28 Crores in the previous year. The consolidated and Associate Companies at the beginning of the year. earnings per share (EPS) for the year 2019-20 was During the year, a Joint Venture company IHB Pvt. ` 20.85, as compared to ` 26.92 in 2018-19. Dividend Ltd. was incorporated. Apart from this, subsequent to of ` 15.00 per fully paid equity share of ` 10/- each has conversion of warrants of ` 650 Crores in Bharat Oman been paid during 2019-20, as compared to ` 17.00 per Refineries Limited (BORL) into equity shares in March, share in the previous year. NRL had a total equity of 2020 the Company’s shareholding in BORL increased ` 5,392.00 Crores as at 31st March, 2020. from existing 50% to 63.38% on 31st March 2020. NRL has 4 Joint Venture companies. Brahmaputra A separate statement containing the salient features of Cracker and Polymer Ltd., a CPSE under the Department the financial statements of Subsidiaries/ Associates/ Joint of Chemicals & Petrochemicals, Government of India, is Venture Companies in Form AOC-1 pursuant to provisions a petrochemical based company located in Dibrugarh of Section 129 (3) of the Act, is attached alongwith the district of Assam. They started operations in January financial statement. 2016 and NRL holds 10% equity share in this company. The Company has placed its financial statements DNP Limited is a Joint Venture between Assam Gas including Consolidated Financial Statements and all Company Limited (51%), NRL (26%) and Oil India other documents required to be attached thereto, on its Limited (OIL) (23%) for transportation of Natural Gas to website www.bharatpetroleum.in as per Section 136(1) Numaligarh Refinery through pipeline. During the year of the Act. Further, the Company has also placed separate 2019-20, DNP Limited transported 268.66 Million Metric
Annual Report 2019-20 43 Standard Cubic Meter (MMSCM) of Natural Gas and had In the year 2019-20, BPCL Group refineries have lifted a revenue of ` 87.96 Crore. The third JV, Assam Bio 5.1 Million barrels out of BPRL’s share of equity crude oil Refinery Private Limited (ABRPL) was incorporated in from the Lower Zakum asset, wherein the consortium of 2018-19, where NRL has 50% equity shares and balance BPRL, ONGC Videsh Ltd. and IOCL has 10% PI. 50% equity shares are held by Fortum and Chempolis Extended Well Testing commenced in the BM-SEAL-11 Oy of Finland. ABRPL has started construction of a bio- concession, which is the first to be carried out in ultra- refinery plant at Numaligarh. The fourth JV, Indradhanush deep waters in the Northeast Brazil offshore. Gas Grid Limited (IGGL) was incorporated in 2018-19. NRL has 20% equity along with Oil and Natural Gas In respect of the Indian block, production continued from Corporation Limited (ONGC), GAIL (India) Limited (GAIL), the block CY-ONN-2002/2 located in Cauvery basin, Tamil Indian Oil Corporation Limited (IOCL) and OIL. IGGL is Nadu with BPRL’s share of production being 2,64,000 implementing the North East Gas Grid project. barrels and development activities progressed in BPRL’s NELP IX operated block, CB-ONN-2010/8 located in BHARAT PETRORESOURCES LIMITED (BPRL) Cambay basin, Gujarat. BPRL was incorporated in October 2006, as a 100% BPRL farmed into 2 OALP blocks – one each in Cauvery subsidiary of BPCL, to cater to the upstream activities Basin (40% PI) and Assam-Arakan Basin (10% PI) as of BPCL. As on 31st March, 2020, BPCL’s investment non-operator with ONGC and OIL; and farmed out 40% PI is ` 5,000 Crores in equity. In addition to this, BPCL to ONGC in its OALP I Operated Block in Cambay Basin. has given a loan of ` 2,950 Crores to BPRL. BPRL has recorded a consolidated income of ` 131.09 Crores and The PI in respect of blocks in India, Israel and Australia are a consolidated loss of ` 301.74 Crores for the Financial held directly by BPRL. The PI in the block in Timor Leste Year ending 31st March, 2020, as against a consolidated is held by BPRL’s wholly owned subsidiary company income of ` 180.63 Crores and consolidated loss of in India, i.e. Bharat PetroResources JPDA Limited. PI in ` 95.69 Crores in the previous year. respect of blocks in Brazil, Mozambique, Indonesia and UAE and equity stake in two Russian entities are held BPRL has Participating Interest (PI) in 27 blocks, of through various step down wholly owned subsidiaries/ which 15 are located in India and 12 overseas, along with equity stake in two Russian entities holding the licence JVs of the wholly owned subsidiaries located in the to four producing blocks in Russia. Seven of the fifteen Netherlands and Singapore. A detailed discussion on the blocks in India were acquired under different rounds of blocks is given in the MDA. New Exploration Licensing Policy (NELP), five blocks BHARAT GAS RESOURCES LIMITED (BGRL) were awarded under Discovered Small Fields Bid Round I BGRL, a wholly owned subsidiary of BPCL for handling and three blocks were awarded under the Open Acreage the Natural Gas business, was incorporated in June 2018. Licensing Policy Bid Round I. Out of twelve overseas blocks, five are in Brazil, two in United Arab Emirates and During the year 2019-20, BGRL has completed the one each in Mozambique, Indonesia, Australia, Israel and Financial Closure submission to PNGRB with respect to Timor Leste. The blocks of BPRL are in various stages of 13 Geographical Areas authorised to BGRL under round exploration, appraisal, pre-development and production. 9 and round 10 of City Gas Distribution (CGD) bidding. The total acreage held by BPRL and its subsidiaries is These CGD projects have been progressing in full swing around 32,304 km2 of which approximately 57% is in terms of project implementation activities and capital offshore. BPRL and its consortia have 26 exploration expenditure of ` 226 Crores was incurred during the discoveries in respect of blocks held in five countries i.e. year with capital commitments of ` 338 Crores as on Brazil, Mozambique, Indonesia, Australia and India. 31st March, 2020. BGRL is also planning to put up a LNG Regasification Terminal along the east coast of India. The During the year 2019-20, the Final Investment Decision detailed feasibility study for the same has been carried out. (FID) for development of 2x6.44 MMTPA LNG Project in Mozambique was announced on 18th June, 2019 and the BHARAT OMAN REFINERIES LIMITED (BORL) project has entered the construction phase. BORL was incorporated in 1994 as a Joint Venture BPRL, through its JV Urja Bharat Pte. Limited (UBPL) between BPCL and OQ S.A.O.C (formerly known as opened an office in Abu Dhabi for the Onshore Block Oman Oil Company S.A.O.C). During the year under 1 concession as Operator and the activities towards review, BPCL has increased its stake in the company by fulfilment of Minimum Work Programme have conversion of Warrants into Shares, raising its stake from commenced. 50% to 63.38%. As on 31st March, 2020, it had authorized
44 Bharat Petroleum Corporation Limited share capital of ` 7,000 Crores and paid up equity share the promoters holds 12.5% of the equity capital of PLL. capital of ` 2,426.83 Crores. The current holding of OQ BPCL’s equity investment in PLL currently stands at is 36.62%. BPCL has given a loan of ` 1,254.10 Crores ` 98.75 Crores. PLL recorded Revenue from Operations and subscribed to Share Warrants of ` 935.68 Crores. of ` 35,452.00 Crores during 2019-20 as compared to Further, the State of Madhya Pradesh has also subscribed ` 38,395.43 Crores recorded in 2018-19. The net profit to ` 26.90 Crores of Share Warrants in BORL. BPCL has for the year stood at ` 2,703.35 Crores, as compared to also subscribed to Zero Percent Compulsorily Convertible ` 2,230.56 Crores in the previous year. The EPS for Debentures of ` 1,000 Crores. the year 2019-20 is ` 18.02, as compared to ` 14.87 Crude oil intake during the year 2019-20 was 7,913 in 2018-19. During the year 2019-20, PLL has paid TMT with average capacity utilization of 95%. The a special interim dividend of ` 5.50 per share and has company has reported Revenue from Operations of recommended final dividend of ` 7.00 per share. ` 41,940.96 Crores in the Financial Year ended as on INDRAPRASTHA GAS LIMITED (IGL) 31st March, 2020, as compared to ` 31,597.59 Crores recorded in the previous financial year. The net loss IGL is a Joint Venture Company promoted by BPCL and for the year 2019-20 stood at ` 803.50 Crores due to GAIL and set up in December 1998. Today, IGL is a leading unprecedented circumstances arising due to outbreak of CGD company in India, supplying natural gas to transport, COVID-19, as compared to profit of ` 106.71 Crores in domestic, commercial and industrial consumers. The the previous year. The Basic EPS for the year stood at operations of IGL spread over NCT of Delhi, Noida & ` (2.35) as against ` 0.31in 2018-19. Greater Noida, Ghaziabad & Hapur, Gurugram, Meerut BPCL-KIAL FUEL FARM PRIVATE LIMITED (BKFFPL) (except area already authorized), Shamli, Muzaffarnagar, Karnal and Rewari. The company is also setting up a CGD BKFFPL was incorporated in May 2015 with an equity network in the Geographical Areas of Kanpur (except participation of 74% by BPCL & 26% by Kannur areas already authorized)-Hamirpur-Fatehpur districts, International Airport Limited. The company was formed to Kaithal district, and Ajmer-Pali & Rajsamand districts. IGL design, construct, commission and operate the Fuel Farm also holds 50% of equity in M/s Central UP Gas Limited, at Kannur International Airport for the supply of ATF on Kanpur & M/s. Maharashtra Natural Gas Limited, Pune, an exclusive basis. The Fuel Farm started operating from Joint Venture Companies promoted by BPCL and GAIL. December 2018 onwards along with the commissioning of Kannur International Airport. As on 31st March, 2020, The paid up share capital of IGL is ` 140 Crores. BPCL the authorized capital of the company is ` 50 Crores and had invested ` 31.50 Crores for 22.5% stake in its equity. paid up capital is ` 9 Crores. During the year 2019-20, During the year 2019-20, IGL showed robust growth the fuel throughput was 44,882 KL. The company earned both in financial and operational numbers. The company a revenue of ` 8.54 Crores in the Financial Year 2019-20 added 55 new Compressed Natural Gas (CNG) stations and loss during the period is ` 1.97 Crores. and 2.72 lakhs new Piped Natural Gas (PNG) domestic st In respect of BORL and BKFFPL, these companies are connections. As on 31 March, 2020, IGL had 555 CNG being managed under joint control mechanism, hence stations and 13.74 lakhs PNG domestic connections. in the consolidated financial statements of the group, the IGL has registered Revenue from Operations of ` 7,165.49 financials of these companies have been consolidated Crores and Profit After Tax of ` 1,248.99 Crores for the as joint ventures as per the requirements of IND AS year ending 31st March, 2020, as compared to Revenue accounting standards. from Operations of ` 6,361.87 Crores and Profit After BPCL JOINT VENTURE COMPANIES AND ASSOCIATES Tax of ` 842.10 Crores in the previous year. The EPS for the year stood at ` 17.84, as against ` 12.03 in the PETRONET LNG LIMITED (PLL) year 2018-19. IGL Board has recommended a dividend of PLL was formed in April 1998 for importing LNG ` 2.80 per share (face value of ` 2 each) for the year and setting up a LNG terminal with facilities like jetty, ending 31st March, 2020, as against a dividend of ` 2.40 storage, regasification etc. to supply natural gas to per share (face value of ` 2 each) in the previous year. various industries in the country. The company has an authorised capital of ` 3,000 Crores and paid up capital of SABARMATI GAS LIMITED (SGL) ` 1,500 Crores. PLL was promoted by four public sector SGL, a Joint Venture Company promoted by BPCL companies viz. BPCL, IOCL, ONGC and GAIL. Each of and Gujarat State Petroleum Corporation (GSPC), was
Annual Report 2019-20 45 incorporated in June 2006 with an authorized capital of the CGD network in Nasik GA (Nasik, Dhule & part of ` 100 Crores for implementing the City Gas Distribution Valsad), Sindhudurg GA in Maharashtra and Ramanagara project for supply of CNG to the household, automobile, GA in the state of Karnataka, which were awarded by the industrial and commercial sectors in the districts of PNGRB under the 9th CGD bidding round. The company Gandhinagar, Mehsana, Aravali, Sabarkantha and Patan was incorporated with an authorised share capital of of Gujarat. The paid up share capital of the company is ` 100 Crores. The paid up capital of the company is ` 20 Crores. As at 31st March, 2020, BPCL has a stake ` 100 Crores. BPCL and GAIL have invested ` 22.50 of 49.94% in the equity capital of SGL. SGL has set up Crores each in MNGL’s equity capital. MIDC, as a 105 CNG stations and is supplying PNG (Domestic) to nominee of Maharashtra Government, had taken 5% 1,89,333 customers. During the year 2019-20, SGL equity in June 2015; the balance 50% is held by IGL, a has commissioned 2 COCO CNG stations located at BPCL Joint Venture Company. Gandhinagar and Modasa. Franchisee CNG concept has been introduced for the first time in SGL. During the year MNGL was awarded as “City Gas Distribution Growing 2019-20, SGL has commissioned 2 Franchisee CNG Company of the Year 2019”, one of the prestigious stations and 5 CNG stations have been commissioned National Awards of the country in the Oil & Gas sector under the State Government’s “CNG Sahabhagi Yojna”. by Federation of Indian Petroleum Industry (FIPI). Besides SGL has achieved turnover of ` 1,179.11 Crores and a this, the company has achieved two milestones in year net profit of ` 129.21 Crores for the financial year ending 2019-20. Firstly, crossing a turnover of ` 1,000 Crores 31st March, 2020, as against ` 1,122.57 Crores and and secondly, achieving sales of 1 MMSCMD. MNGL ` 100.47 Crores respectively for the previous year. The has achieved Revenue from Operations of ` 1,074.45 EPS for the year stood at ` 64.56, as against ` 50.22 in Crores and profit of ` 223.33 Crores for the year ending st 2018-19. The company has recommended a dividend of 31 March, 2020, as against Revenue of ` 901.63 Crores ` 4.50 per share for the year ending 31st March, 2020, as and profit of ` 142.65 Crores respectively in the previous against ` 3.25 per share in the previous year. year. The EPS for the year 2019-20 stood at ` 22.33, as against ` 14.27 in 2018-19. The MNGL Board has CENTRAL UP GAS LIMITED (CUGL) recommended a dividend of ` 6.00 per share for the year st CUGL is a Joint Venture Company set up in February ending 31 March, 2020, as against a dividend of ` 2.64 2005 with GAIL as the other partner for implementing per share in the previous year. projects for supply of CNG to the automobile sector and HARIDWAR NATURAL GAS PRIVATE LIMITED (HNGPL) PNG to the household, industrial and commercial sectors in Kanpur (including parts of Unnao district), Bareilly and BPCL has signed a Joint Venture Agreement with GAIL Jhansi in Uttar Pradesh. The company was incorporated Gas Limited for implementation of a City Gas Distribution with an authorised share capital of ` 60 Crores. The joint Project in the geographical area of Haridwar and formed venture partners have each invested ` 15 Crores for an a Joint Venture Company, Haridwar Natural Gas Pvt Ltd. equity stake of 25% each in the company, the balance on a 50:50 basis. HNGPL was incorporated in April 2016 50% being held by IGL. CUGL has set up 47 CNG with an authorised share capital of ` 45 Crores. As on stations. CUGL has achieved Revenue from Operations 31st March, 2020, the promoters have infused ` 22.20 of ` 345.33 Crores and net profit of ` 73.64 Crores for Crores each towards equity contribution. The project cost the year ending 31st March, 2020, as against ` 328.03 for the first five years is approx. ` 148 Crores, which will Crores and ` 52.11 Crores respectively for the previous be funded through a debt equity of 70:30. year. The EPS for the year stood at ` 12.27, as against GOA NATURAL GAS PRIVATE LIMITED (GNGPL) ` 8.68 in 2018-19. GNGPL was incorporated in January 2017 as a Joint MAHARASHTRA NATURAL GAS LIMITED (MNGL) Venture Company with GAIL Gas Limited on a 50:50 MNGL was set up in January 2006 as a Joint Venture basis for implementation of a City Gas Distribution Project Company with GAIL for implementing the project for in the geographical area of North Goa. The authorised supply of natural gas to the household, industrial, share capital of the company is ` 50 Crores and as on commercial and automobile sectors in Pune and its 31st March, 2020 the promoters have infused ` 17.50 nearby areas. MNGL, while strengthening its roots in Crores each towards equity contribution. The project cost the existing authorized Geographical Area(GA) covering for the first five years is approx. ` 119 Crores, which is Pune and adjoining areas, is also on its way to expand being funded through a debt equity of 70:30.
46 Bharat Petroleum Corporation Limited BHARAT STARS SERVICES PRIVATE LIMITED (BSSPL) MUMBAI AVIATION FUEL FARM FACILITY PRIVATE LIMITED (MAFFFPL) BSSPL, a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated in MAFFFPL was incorporated in February 2010. BPCL, September 2007, for providing Into Plane (ITP) fuelling IOCL and HPCL became joint venture partners along- with Mumbai International Airport Private Limited (MIAL) services at open access airports in India. The authorised th and paid up share capital of BSSPL is ` 20 Crores. The on 28 October, 2014 with equity holding of 25% each. Presently, BPCL has invested an amount of ` 48.29 two promoters have each subscribed to 50% of the equity Crores towards equity so far. MAFFFPL has started its share capital of BSSPL and BPCL’s present investment operations from February 2015. The business of the stands at ` 10 Crores. The company has also incorporated company is to operate & maintain the existing Aviation a wholly owned subsidiary viz. Bharat Stars Services fuel farm facilities and to provide Into-plane services at Pvt. (Delhi) Ltd. for implementing ITP Fuelling services Chhatrapati Shivaji Maharaj International Airport (CSMIA), exclusively at the new T3 Terminal of Delhi International Mumbai. MAFFFPL is constructing the Integrated Fuel Airport. BSSPL is presently providing ITP Services at three Farm Facility on an open access basis and the first phase open access airports viz. Bengaluru, Mumbai & Delhi T3. of commissioning activities have been completed. The It also manages operations at Aviation Stations for other revenue to MAFFFPL is by way of the Fuel Infrastructure oil companies in India. The company is now venturing Charges, payable by the Suppliers for utilising the Facility. into manpower support services in the petroleum sector. MAFFFPL has registered a Revenue from Operations of Presently, the company is operating at 34 locations in ` 113.64 Crores and net profit of ` 40.05 Crores for the year ending 31st March, 2020, as against revenue of India. BSSPL has achieved a consolidated turnover of ` 137.11 Crores and net profit of ` 51.84 Crores during ` 52.40 Crores and consolidated profit of ` 5.89 Crores st the previous year. The EPS for the year stood at ` 2.07, for the financial year ending 31 March, 2020, as against as against ` 2.75 in 2018-19. ` 50.27 Crores and ` 5.57 Crores respectively for the previous year. The EPS for the current year i.e. 2019-20 KANNUR INTERNATIONAL AIRPORT LIMITED (KIAL) is ` 2.95 as against ` 2.78 in 2018-19. The company KIAL is an Unlisted Public Company promoted by the has recommended a dividend of ` 0.25 per share for Government of Kerala to build and operate the airport the financial year ending 31st March, 2020, as against a at Kannur on international standards, primarily to cater dividend of ` 0.50 per share in the previous year. to the travelling needs of the large NRI population in the region, who travel frequently to various international DELHI AVIATION FUEL FACILITY PRIVATE LIMITED destinations, the flourishing business community and (DAFFPL) tourists. The project cost was ` 2392 Crores, of which ` 1,500 Crores will be financed through equity and the A Joint Venture Company, DAFFPL has been promoted by balance sum of ` 892 Crores will be financed by way BPCL, IOCL and Delhi International Airport Limited (DIAL) of borrowings. The paid up capital of the company as for implementing open access Aviation Fuel facility for on 31st March, 2020 is ` 1,338.12 Crores, out of which the new T3, T2 and cargo terminals at Delhi International BPCL has made a contribution of ` 216.80 Crores. Kannur Airport. Currently, the company is setting up an Aviation Airport was commissioned on 9th December, 2018, as hydrant system at T1 terminal of Delhi International Airport 4th international airport in Kerala, the only State in the as well. The authorized and paid up share capital of the country to have 4 international airports. During the year company is ` 170 Crores and ` 164 Crores respectively. 2019-20, total aircraft movements were 15,142 and BPCL and IOCL each have subscribed to 37% of the passenger traffic was approx. ` 15.83 lakhs. share capital of the joint venture, while the balance 26% MATRIX BHARAT PTE LIMITED (MXB) has been held by DIAL. DAFFPL has registered Revenue from Operations of ` 123.96 Crores and net profit of MXB is a Joint Venture Company incorporated in Singapore ` 41.43 Crores for the year ending 31st March, 2020, in May 2008 for carrying out the bunkering business and supply of marine lubricants in the Singapore market, as as against revenue of ` 161.35 Crores and net profit of well as international bunkering, including expanding into ` 50.96 Crores respectively during the previous year. The Asian and Middle East markets. The company has been EPS for the year stood at ` 2.53, as against ` 3.11 in promoted by BPCL and Matrix Marine Fuels L.P. USA, an 2018-19. The company has recommended a dividend of affiliate of the Mabanaft group of companies, Hamburg, ` 0.65 per equity share for the year ending 31st March, Germany. The authorised capital of the company is USD 2020, as against a dividend of ` 0.80 per share in the 4 million. BPCL has subscribed 20 lakh shares for an previous year. equivalent sum of ` 8.41 Crores. Both the partners have
Annual Report 2019-20 47 contributed equally to the share capital. Matrix Marine Plant at Ramagundam has been commissioned on Fuels L.P. USA subsequently transferred their share and 14th October, 2019 and the gas transportation to RFCL interest in the joint venture in favour of Matrix Marine Fuels has started w.e.f. 1st November, 2019. The Company has Pte Limited, Singapore which has further in July 2020 been transported approx. 2.17 MMSCM of gas and has earned substituted by Bomin International Holding Gmbh, another a nominal revenue through transportation of gas, as the affiliate of the Mabanaft group. MXB has reported a profit tariff is lower in the initial years of operation. of USD 0.03 million for the year ending 31st December, GSPL INDIA GASNET LIMITED (GIGL) 2019, as against USD 0.04 million for the year ending 31st December, 2018. GIGL is a Joint Venture of GSPL, IOCL, BPCL and HPCL. BPCL has 11% equity participation in the company, KOCHI SALEM PIPELINE PRIVATE LIMITED (KSPPL) the balance being held by GSPL (52%), IOCL (26%) & BPCL has signed a Joint Venture Agreement with IOCL HPCL (11%). BPCL has made an equity contribution for implementation of the Kochi-Coimbatore-Salem LPG of ` 103.62 Crores as on 31st March, 2020. GIGL has Pipeline Project and formed a Joint Venture Company, been authorized to lay two cross country gas pipelines KSPPL in January 2015, on a 50:50 basis. As on viz 1,834 km Mehsana to Bhatinda Pipeline (MBPL) and 31st March, 2020, BPCL has paid an amount of ` 152.50 740 km Bhatinda to Srinagar Pipeline. The initial sections Crores towards equity in this JV Company. The project is of the project covering approx. 440 kms viz. Barmer- presently underway. Pali Pipeline, Palanpur-Pali Pipeline and Jalandhar- Amritsar Pipeline were completed during the year 2018- The Project is being executed in 4 phases. The 1st phase 19 and have commenced commercial operations. The is a 12 km 12” pipeline from Kochi Refinery (KR) to IOCL company has transported approx. 629.59 MMSCM of Udayamperoor Bottling plant & 155 km 12” pipeline from gas and has earned total revenue of ` 108.96 Crores KR to Palakkad receipt terminal. The 12 km pipeline from through transportation of gas till 31st March, 2020. The KR Despatch Terminal (DT) to Udayamperoor Receipt company is also implementing various sections of the Terminal (RT) was commissioned on 20th August, 2017 MBPL Project planned under Phase II and has awarded and during the year 2019-20, 131.43 TMT LPG was EPC contracts for several sections covering approx. 930 transported through this pipeline. With respect to the kms which will traverse through the states of Rajasthan, 155 km pipeline from BPCL-KR DT to Palakkad RT, the Haryana and Punjab and will cater to the gas demands pipeline lowering is in an advanced stage and the overall of various industrial customers and city gas networks physical progress achieved as on 31st March, 2020 is enroute the Pipeline. Project implementation activities for 91.20%. these sections are in full swing. The second phase is a 42 km 12” pipeline from FINO PAYTECH LIMITED (FINO) Puthuvypeen IOCL import terminal to KR. The overall physical progress achieved for this section is 34.50%. BPCL acquired shares in FINO in the year 2016-17 and The 3rd and 4th phases are 50 km 12” pipeline from made an investment of ` 251 Crores. FINO Payments Palakkad RT to Coimbatore RT and a 170 km 8” pipeline Bank (FPB) (A FINO group entity) completes its third from Coimbatore RT to Salem RT. For these two phases, year of operation in June 2020. FPB evolved a new cost- the Tamil Nadu Government order on RoU acquisition effective channel of operations through the Merchant & compensation was released on 14th February, 2020 Network and stabilized 266 branches across India as on and activities for identification/acquisition of RoU have 31st March, 2020. Consolidated Revenue from Operations started. during the year stood at ` 827.37 Crores and consolidated loss for the year 2019-20 was ` 20.67 Crores, as against GSPL INDIA TRANSCO LIMITED (GITL) ` 527.24 Crores and ` 73.33 Crores respectively for the GITL is a Joint Venture of Gujarat State Petronet previous year. Limited (GSPL), IOCL, BPCL and Hindustan Petroleum PETRONET INDIA LIMITED (PIL) Corporation Limited (HPCL). BPCL has 11% equity participation in the company, the balance being held by PIL was formed in the year 1997 as a financial holding GSPL (52%), IOCL (26%)& HPCL (11%). GITL has been company to give impetus to the development of a pipeline authorised to lay a 1,881 km pipeline from Mallavaram network throughout the country. The company carried out to Bhilwara. BPCL has made an equity contribution business through SPVs and Joint Venture Companies. of ` 54.12 Crores as on 31st March, 2020. The initial With the new Pipeline policy, oil companies were allowed section of the project from Reliance Gas Transmission to establish their own pipeline network. PIL obtained India Limited interconnection point at Kunchanapalli to appropriate approvals and proceeded to liquidate its Ramagundam Fertilizers & Chemicals Limited’s (RFCL) investments in joint ventures and subsidiaries. PIL’s
48 Bharat Petroleum Corporation Limited equity has been purchased by respective promoter products in the country. Accordingly, BPCL, IOCL and companies viz. Petronet CCK Limited stake has been HPCL entered into a Joint Venture Agreement and the taken over by BPCL, Petronet MHB Limited stake has JV Company, RRPCL was incorporated in September been taken over by HPCL and ONGC and Petronet VK 2017 with an authorised capital of ` 400 Crores. As on Limited stake has been taken over by IOCL and Reliance 31st March, 2020, BPCL has made an equity contribution Industries Limited (RIL). PIL filed an application before of ` 50 Crores. Saudi Aramco showed interest in taking NCLT and paid up share capital was reduced from equity in RRPCL and a non-binding MoU for Key Business ` 100 Crores to ` 1 Crore and ` 99 Crores was returned Principles was signed on 11th April, 2018. Saudi Aramco to its promoters. BPCL has 16% equity participation in also sought to include another strategic partner to co-invest the company with current investment of ` 0.16 Crores. in the project as an overseas investor and accordingly, During the year 2018-19, shareholders of the company signed a MoU with ADNOC on 25th June, 2018. Saudi had approved voluntary winding up of PIL and appointed Aramco and ADNOC have expressed their intent to together an Official Liquidator (OL) for the same. Liquidation of the hold up to 50% of the share capital of RRPCL as a Non- company is under process. Resident Block as per the MoU, with the Indian consortium holding the balance 50% as a Resident Block. PETRONET CI LIMITED (PCIL) City and Industrial Development Corporation (CIDCO) was PCIL was set up for laying a pipeline for evacuation of entrusted with land acquisition at Raigad District by the petroleum products from refineries at Jamnagar/ Koyali Government of Maharashtra. A Market Study was carried to feed consumption zones in Central India. BPCL has out as a prelude/basis to Pre-feasibility Report (PFR) an equity participation of 11% in this JV. Promoter by an internationally renowned consultant to assess companies have decided to exit from PCIL, and provision and forecast the demand of Petrochemical Products for full diminution in the value of investment has been and the pricing details of Crude, Fuel Products and done in the accounts of BPCL The company is under Petrochemicals. To carry out the Configuration Study of liquidation. the mega integrated complex, an international consultant BHARAT RENEWABLE ENERGY LIMITED (BREL) was engaged in July 2018. The entire job was completed in 4 phases and the final report has been submitted in BREL was incorporated in June, 2008 for undertaking March 2020. Based on the configuration finalized, PFR is the production, procurement, cultivation and plantation being carried out. of horticulture crops such as Karanj, Jathropha and IHB PRIVATE LIMITED (IHBPL) Pongamia, trading, research and development and management of all the crops and plantation including IHBPL is a Joint Venture Company of IOCL, BPCL and Biofuels in the State of Uttar Pradesh, with an authorized HPCL with equity participation in the ratio of 50:25:25. capital of ` 30 Crores. The company has been promoted Subsequent to receipt of authorization from PNGRB, by BPCL with Nandan Cleantec Limited (Nandan Biomatrix IHBPL has been incorporated in July 2019 to construct, Limited), Hyderabad and the Shapoorji Pallonji group, operate and manage about 2,800 km long Kandla- through their affiliate, S.P. Agri Management Services Gorakhpur LPG Pipeline for meeting the LPG demand Pvt. Ltd. A Company Petition was filed before the Hon’ble of the bottling plants en-route the pipeline in Gujarat, High Court of Allahabad (Lucknow Bench) for winding up Madhya Pradesh and Uttar Pradesh. BREL. By the judgement dated 21.12.2015, the company The pipeline would source LPG from import terminals was ordered to be wound up and an OL to proceed in at Kandla, Dahej and Pipavav on the western coast and accordance with the provisions of the Companies Act also two refineries, i.e. Koyali Refinery of IOCL and Bina was appointed. All assets and records of the company Refinery of BORL and deliver LPG to 22 LPG bottling have been deposited with the OL and the OL has since plants en-route. One-third of the project cost is being submitted a status request to the Hon’ble High Court. A met through equity by promoters and balance two-third reply to the report submitted by the OL has been given through debt. IHBPL has tied up a Rupee Term Loan and the matter is pending in the Hon’ble High Court of arrangement through a consortium of 5 banks led by Allahabad. State Bank of India. Financial closure of the project has RATNAGIRI REFINERY & PETROCHEMICALS LIMITED been achieved and project implementation is underway. (RRPCL) UJJWALA PLUS FOUNDATION (UPF) An integrated refinery and petrochemical complex of UPF was incorporated in July 2017, as a Joint Venture about 60 MMTPA capacity was conceived by the Oil PSUs Company among the three PSU Oil Marketing Companies (OMCs) in the west coast of Maharashtra State, based on viz. BPCL, HPCL & IOCL (in the ratio of 25:25:50) under growing demand of petroleum fuels and petrochemical Section 8 of the Companies Act, 2013. The company
Annual Report 2019-20 49 receives donations from individuals/Corporates/NGOs etc. Similarly, Section 197 of the Act shall not apply to which shall be utilized for extending financial assistance a Government Company. Consequently, there is no for making LPG available to economically disadvantaged requirement of disclosure of the ratio of the remuneration households who are not covered by the Pradhan Mantri of each Director to the median employee’s remuneration Ujjwala Yojana. and other such details, including the statement showing MANAGEMENT DISCUSSION & ANALYSIS REPORT the names and other particulars of every employee of (MDA) the Company, who if employed throughout / part of the financial year, was in receipt of remuneration in excess The MDA for the year under review, as stipulated under of the limits set out in the Rules are not provided in terms Regulation 34(e) of SEBI (Listing Obligations and of Section 197 (12) of the Act read with Rule 5 (1) / (2) Disclosures Requirement) Regulations, 2015 is presented of the Companies (Appointment and Remuneration of in a separate section forming part of the Annual Report. Managerial Personnel) Rules, 2014. The forward looking statements made in the MDA are The Chairman & Managing Director and the Whole- based on certain assumptions and expectations of time Directors of the Company did not receive any future events. The Directors cannot guarantee that these remuneration or commission from any of its Subsidiaries. assumptions are accurate or these expectations will materialise. BPCL being a Government Company, its Directors are appointed / nominated by the Government of India as CONSERVATION OF ENERGY, RESEARCH AND per the Government / DPE Guidelines, which also include DEVELOPMENT, TECHNOLOGICAL ABSORPTION AND fixation of pay criteria for determining qualifications and FOREIGN EXCHANGE EARNINGS AND OUTGO other matters. The particulars as prescribed under Sub-Section (3)(m) CORPORATE GOVERNANCE of Section 134 of the Companies Act, 2013 read with The Report on Corporate Governance, together with the Companies (Accounts) Rules, 2014, are enclosed as the Auditors’ Certificate on compliance of Corporate Annexure A to the Directors’ Report. Governance, is annexed as Annexure D, as required under MEMORANDUM OF UNDERSTANDING WITH MINISTRY Listing Regulations and Department of Public Enterprises OF PETROLEUM & NATURAL GAS Guidelines of Corporate Governance for Central Public BPCL has entered into a Memorandum of Understanding Sector Enterprises. (MoU) for the year 2019-20 with the Ministry of Petroleum SECRETARIAL STANDARDS & Natural Gas. MoU for 2020-21 is under finalization. The Company complies with the mandatory Secretarial BPCL has been achieving “Excellent” performance rating Standards issued by the Institute of Company Secretaries since 1990-91 till 2018-19. In 2018-19, BPCL achieved of India. an “Excellent” rating with composite score of 90.79. SOCIAL, ENVIRONMENTAL AND ECONOMIC BOARD EVALUATION RESPONSIBILITIES AND BUSINESS RESPONSIBILITY The provisions of Section 134 (3)(p) of the Act shall not REPORT apply to a Government Company in case the Directors The Company is committed to be a responsible Corporate are evaluated by the Ministry, which is administratively Citizen in society, which leads to sustainable growth in charge of the Company as per its own evaluation and economic development for the nation as well as all methodology. BPCL being a Government Company, the stakeholders. In order to be a responsible business to meet performance evaluation of the Directors is carried out by its commitment, the Board of Directors of the Company the Administrative Ministry (MoP&NG), Government of has adopted and delegated to the Sustainability Committee India, as per applicable Government guidelines. the implementation of a Business Responsibility Policy PARTICULARS OF EMPLOYEES AND RELATED based on the principles of National Voluntary Guidelines DISCLOSURES on Social, Environmental and Economic Responsibilities The provisions of Section 134(3)(e) of the Act are not of Business as issued by the Ministry of Corporate Affairs, applicable to a Government Company. Consequently, Government of India. BPCL’s Sustainability Report is in details on Company’s policy on Directors’ appointment accordance with the Global Reporting Initiative (GRI). and other matters are not provided under Section 178 (3) As stipulated under the Listing Regulations, the Business of the Act. Responsibility Report describing the initiatives taken
50 Bharat Petroleum Corporation Limited by the Company from the environmental, social and DIRECTORS’ RESPONSIBILITY STATEMENT governance perspective is attached as part of the Annual Pursuant to Section 134(3)(c) / (5) of the Companies Act, Report. 2013, the Directors of the Company confirm that: TRANSACTION WITH RELATED PARTIES a) In the preparation of the Annual Accounts for the year During the Financial Year, the Company has entered into ended 31st March, 2020, the applicable Accounting contracts or arrangements with related parties, which Standards have been followed along with proper were in the ordinary course of business and on an arm’s explanation relating to material departures; length basis. b) The Directors have selected such accounting policies The required information on transactions with related and applied them consistently and made judgements parties are provided in Annexure F in Form AOC-2 in and estimates that are reasonable and prudent so as accordance with Section 134(3) of the Act and Rule 8(2) to give a true and fair view of the state of affairs of the of the Companies (Accounts) Rules, 2014. Company at the end of the financial year and of the profit and loss of the Company for that period; In terms of Listing Regulations and Policy of the Company c) The Directors have taken proper and sufficient care on materiality of related party transactions, a transaction for the maintenance of adequate accounting records entered into with Bharat Oman Refineries Limited, a in accordance with the provisions of the Act for group company could be considered material. The details safeguarding the assets of the Company and for of the transaction are being placed for approval of the preventing and detecting fraud and other irregularities; shareholders. d) The Directors have prepared the annual accounts on a The Policy on related party transactions including material ‘going concern’ basis; related party are available on the Company’s website at the link https://www.bharatpetroleum.com/about-bpcl/ e) The Directors have laid down internal financial controls our-policies.aspx to be followed by the Company and such internal financial controls are adequate and are operating PARTICULARS OF LOANS, GUARANTEES OR effectively; and INVESTMENTS f)The Directors have devised proper systems to ensure The Company has provided Loans/Guarantees to its compliance with the provisions of all applicable laws and Subsidiaries/Joint Ventures and has made Investments such systems are adequate and operating effectively. in compliance with the provisions of the Companies Act, DIRECTORS AND KEY MANAGERIAL PERSONNEL 2013. The details of such investments made and loans/ guarantees provided as at 31st March, 2020, are given Shri D. Rajkumar, C&MD superannuated at the close of in the Disclosures under Regulation 34 of SEBI (Listing office hours on 31.08.2020. The Directors have placed on Obligations and Disclosure Requirements) Regulations, record their deep appreciation on behalf of the Board for 2015 in Annexure H. the valuable contributions made and guidance given by him for the development and progress of the company’s RISK MANAGEMENT business. Shri K. Padmakar, Director (Human Resources) has been entrusted with the additional charge of the post The Risk Management Committee has been constituted of Chairman and Managing Director w.e.f. 01.09.2020 by by the Board. The Board has defined the roles and Ministry of Petroleum and Natural Gas. responsibilities of the Risk Management Committee, which includes reviewing and recommending of the risk Shri R. Ramachandran, Director (Refineries) management plan comprising risks assessed and their superannuated at the close of office hours on mitigation plans and reviewing and recommending the 31.08.2020. The Directors have placed on record their risk management report for approval of the Board with the deep appreciation on behalf of the Board for the valuable recommendation of the Audit Committee. The Company’s contributions made and guidance given by him for the internal financial controls and risk management systems development and progress of the Company’s business. are assessed by the Audit Committee. The Company has Shri Rajesh Aggarwal, Additional Secretary & Financial adopted a Risk Management Charter and Policy for self- Advisor, Ministry of Petroleum & Natural Gas was regulatory processes and procedures for ensuring the appointed as Additional Director w.e.f. 08.01.2020. As conduct of the business in a risk conscious manner and he has been appointed as Additional Director, he will hold for managing risks on an ongoing basis. office till the ensuing Annual General Meeting (AGM).
Annual Report 2019-20 51 Notice under Section 160 of the Act has been received AUDIT COMMITTEE proposing his name for appointment as Director at the The details of the composition of the Audit Committee, ensuing AGM. terms of reference, meetings held etc. are provided in the Shri Harshadkumar P. Shah was appointed as Additional Corporate Governance Report which forms part of this Director on the Board to act as an Independent Director Report. w.e.f. 16.07.2019. The Shareholders have appointed him VIGIL MECHANISM as an Independent Director of the Company at the AGM held on 30.08.2019. There exists a vigil mechanism to report genuine concerns in the Organisation. The Company has implemented the Shri Rajesh Kumar Mangal, Independent Director ceased Whistle Blower Policy to ensure greater transparency in to be a Director w.e.f. 01.12.2019 on completion of his all aspects of the Company’s functioning. The objective tenure. Shri Rajiv Bansal, Government Nominee Director of the policy is to build and strengthen a culture of ceased to be a Director of the Board w.e.f. 08.01.2020. transparency and to provide employees with a framework Shri Vishal V Sharma, Independent Director ceased to for responsible and secure reporting of improper activities. be a Director w.e.f. 09.02.2020 on completion of his tenure. Smt. Jane Mary Shanti Sundharam, Independent The vigil mechanism provides for adequate safeguards Director resigned from Directorship w.e.f. 05.03.2020 against victimisation of persons who use the mechanism due to personal reasons. The Directors have placed on and has provision for direct access to the Chairperson record their deep appreciation on behalf of the Board for of the Audit Committee in appropriate or exceptional the valuable contributions made and guidance given by cases. The details of establishment of such a them for the development and progress of the Company’s mechanism are disclosed in the Company’s web link: business. https://www.bharatpetroleum.com/about-bpcl/our- policies.aspx Shri Vinay Sheel Oberoi, Independent Director ceased to be the Director of the Board w.e.f. 10.04.2020 due to his NUMBER OF MEETINGS OF THE BOARD demise. The Directors place on record his contributions Sixteen meetings of the Board of Directors were held towards the Company and express their deep condolences during the year, the details of which are given in the for his sad demise. Corporate Governance Report that forms part of this Smt. V. Kala was appointed as Company Secretary w.e.f. Report. The intervening gap between the meetings was 13.2.2020. Shri M. Venugopal, Company Secretary within the period prescribed under the Companies Act, superannuated on 31.12.2019. 2013 and the Listing Regulations. Dr. K. Ellangovan, Director will retire by rotation at the EXTRACT OF ANNUAL RETURN ensuing AGM as per the provisions of Section 152 As required under Section 92 (3) of the Act, extract of of the Act and being eligible, has offered himself for Annual Return of the Company is annexed herewith reappointment as Director at the said Meeting. in specified Form MGT-9 as Annexure G to this Report As required under the Corporate Governance Clause, and is also placed on the website of the Company at brief bio-data of the above Directors who are appointed / www.bharatpetroleum.in under the Investors’ column. reappointed at the AGM are provided in the Notice. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH DECLARATION OF INDEPENDENCE REFERENCE TO THE FINANCIAL STATEMENTS The Independent Directors of the Company have provided The details are included in the MDA which forms part of a declaration confirming that they meet the criteria of this Report. independence as prescribed under the Companies Act, STATUTORY AUDITORS 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. M/s. CVK & Associates, Chartered Accountants, Mumbai and M/s. Borkar & Muzumdar, Chartered Accountants, FAMILIARISATION PROGRAMMES Mumbai, were appointed as Statutory Auditors for the The Company has adopted a policy for the training year 2019-20, by the Comptroller & Auditor General of requirements of Board Members. The details thereof India (C&AG), under the provisions of Section 139(5) with the programmes sponsored for familiarisation of of the Companies Act, 2013. They will hold office till Independent Directors with the Company are available at conclusion of the ensuing AGM. The C&AG has been the Company’s web link: https://www.bharatpetroleum. approached for the appointment of Statutory Auditors for com/about-bpcl/our-policies.aspx the financial year 2020-21.
52 Bharat Petroleum Corporation Limited The Auditors’ Report does not contain any qualification, Independent Directors including Woman Director falls reservation or adverse remark. under the purview of the Government of India. BPCL has from time to time communicated to the Ministry of COST RECORD AND COST AUDIT Petroleum & Natural Gas with respect to the requirements The Company has prepared and maintained cost records of Independent Directors under SEBI (Listing Obligations as prescribed under Section 148(1) of the Companies and Disclosure Requirements) Regulations, 2015.” Act, 2013 for the year 2019-20. The Cost Audit Report GENERAL for the year 2018-19 has been filed with the Ministry of Corporate Affairs before the due date in XBRL Format. There were no significant or material orders passed by The Cost Auditors for the year 2018-19 were M/s ABK & the Regulators or Courts or Tribunals impacting the going Associates, Mumbai and M/s Bandyopadhyaya Bhaumik concern status and Company’s operations in future. The & Company, Mumbai. The same Cost Auditors have been Company has not issued equity shares with differential appointed for the year 2019-20. rights / sweat equity shares. SECRETARIAL AUDITOR The Company has an Internal Complaints Committee (ICC) to address complaints pertaining to sexual The Board has appointed M/s Dholakia & Associates LLP, harassment in the workplace. During the year under Company Secretaries to conduct the Secretarial Audit for review, there were 7 complaints of sexual harassment in the year 2019-20. The Secretarial Audit Report for the respect of our employees. The matter was taken up by st financial year ended 31 March, 2020 is enclosed as the ICC, enquiries were conducted by them and 5 cases Annexure I to this Report. were resolved and closed. There are 2 pending cases as The Secretarial Audit Report contains observations that on 31st March, 2020. There were no pending complaints the Company did not have the following : pertaining to the previous year. a) A Woman Director on its Board pursuant to the second ACKNOWLEDGEMENTS proviso of sub-section (1) of Section 149 of the Act In these calamitous times of the global COVID-19 read with Companies (Appointment and Qualification pandemic, our employees have been in the forefront, of Directors) Rules, 2014 and Regulation 17(1)(a) of leading the challenge with grit, determination and SEBI (Listing Obligations & Disclosure Requirements) resilience, expending tremendous efforts in fuelling Regulations, 2015 for the period 05.03.2020 to the nation. The Directors commend their diligence and 31.03.2020. dedication and reiterate their stance on considering them b) Optimum combination of executive and non-executive as the most valuable assets of the Company. directors, pursuant to Regulation 17(1)(a) of SEBI The Directors gratefully acknowledge the support (Listing Obligations & Disclosure Requirements) and guidance received from various Ministries of the Regulations, 2015 and CPSE Guidelines for the period Government of India, particularly the Ministry of Petroleum 05.03.2020 to 31.03.2020. & Natural Gas, and from various State Governments that c) Sufficient number of Independent Directors on its Board, have been instrumental in BPCL’s creditable performance. as required under Regulation 17(1)(b) of SEBI (Listing The Directors also appreciate the loyalty and Obligations & Disclosure Requirements) Regulations, encouragement of the customers, business partners and 2015 and CPSE Guidelines for the period under review shareowners, which have underpinned BPCL’s growth i.e. 01.04.2019 to 31.03.2020 and pursuant to sub- trajectory through the years. section (4) of Section 149 of the Act for the period The Directors assure of their commitment to BPCL’s plans from 09.02.2020 to 31.03.2020. to succeed in a disruptive future, continuously expanding Explanations by the Board to the above observations in horizons to deliver immense value. the Secretarial Auditor Report: For and on behalf of the Board of Directors “Bharat Petroleum Corporation Ltd. is a Government Company under the Administrative Control of Ministry of Petroleum and Natural Gas. The nomination/appointment Sd/ of all categories of Directors are done by Government K. Padmakar of India in accordance with the laid down guidelines of Chairman & Managing Director Department of Public Enterprises. Accordingly, the subject Place : Mumbai matter of nomination/appointment of adequate number of Date : 5th September, 2020
Annual Report 2019-20 53 Management Discussion & Analysis Report
Humanity witnessed the severest of global health and the crisis through a plethora of fiscal and monetary policy economic crisis of modern times as the COVID-19 stimulus and financial support, the global economic pandemic paralyzed the world and impacted lives in an growth is expected to slip deep into the negative zone by unforeseen manner. The crisis is unprecedented in several the end of year 2020, much worse than that witnessed ways and one of the vilest in peacetime in at least the last during the 2008–09 financial crisis. In the event that century. As the world remained locked down for weeks the pandemic recedes in the second half of 2020 and together in its fight against the pandemic, economy, economic activity normalizes with policy support and travel, trade and human life suffered severely. While the gradual unwinding of containment measures, the world world is trying to gather the pieces and jumpstart the economy is expected to grow at a higher pace in 2021. economic engine, uncertainty looms large. However, the global growth projection is overwhelmed with uncertainty, as it hinges on factors extremely difficult Economic Developments: Distress in stress to predict at this stage, like the pathway of the pandemic, The world economy grew at a slower pace of sub 3% the efficacy of containment measures and the pace levels in the year 2019, lower than that witnessed in the and extent of unwinding, response to policy stimulus, year 2018, due to adverse impacts of trade protectionism, financial market movements, behavioral changes geopolitical tensions, financial stress in key emerging affecting spending and investment, global trade and market economies, heightened social unrest in many travel, business and consumer confidence and volatility countries and weather related disasters. In end 2019, just in commodity prices. as the global economy was looking forward to stabilizing The pandemic has posed severe risks to the global supported by easing of trade barriers , abating of Brexit economy. It is considered as the worst crisis since concerns, adoption of accommodative monetary policies the Great Depression during the 1930s. The crisis has by Central Banks and bottoming out of manufacturing a contagion nature and a domino effect with maximum activity and global trade, the worst pandemic in decades risk to the lower strata of economies, businesses and of modern history hit hard. The COVID-19, which population. The disruptions in global and domestic supply emanated in China in December 2019, engulfed within and value chains, interruption in international trade and its fold almost the entire world within a span of few travel, lower productivity levels, closure of work places, weeks. With no known remedies available to combat suspension of activity and postponement of investment the fast spreading deadly pandemic, nations across the may lead to workforce layoffs, reduced income levels world responded by enforcing lockdowns, mandating and reduced spending, which will further exert downward social distancing, instituting preventive protocols and pressure on demand, leading to more business closures augmenting healthcare systems on a war footing - and job losses. The stress in the financial markets, liquidity measures aimed at slowing down the spread of the virus crunch and rising debts can amplify the effects further and containing the damage. The last time the world faced with limited room available with policymakers. Downsides a pandemic crisis of the scale of COVID-19 was in 1918, notwithstanding, targeted timely and massive fiscal, when the indomitable H1N1 influenza spread across the monetary and financial market reforms and measures world claiming millions of human lives. may facilitate resumption of economic activity towards The disruption in economic activity, global trade and travel normal levels and neutralize the effect of the shock, has triggered a deep economic crisis across the world. In especially in the sectors and sections worst affected spite of genuine attempts to counter adverse impacts of by the pandemic. Enhanced international cooperation,
54 Bharat Petroleum Corporation Limited India & World GDP Growth % 12 3.5 10 3.0 8 2.5 ge ta
6 2.0 illi on tr en
4 1.5 D rc US Pe 2 1.0 - 0.5 (2) - 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 India GDP : GDP (current USD trillion) World India information sharing, coordinated medical research and trajectory of inflation will be determined by the evolution interventions and provision of financial assistance to of the COVID-19 situation and the pace of economic weaker economies would be required for a broad-based recovery. recovery in the global economy. Nevertheless, checking The outbreak of pandemic bore heavily on the foreign the spread of the virus and finding an effective cure for the exchange rates across the emerging market economies, disease remain the critical prerequisites. with the Indian Rupee (INR) touching a staggering low While the Indian economy grew at a slower pace of of 76.15 against the USD dollar (USD) in the month of around 4.2% in the year 2019-20 due to factors like March 2020 and depreciating by around 9.0% by the slowing consumption, declining investments, muted close of year 2019-20. The INR came under intensified export growth and deepening financial stress, the outlook depreciation pressures towards end February 2020, for 2020-21 looked encouraging before the onset of as global trade disrupted and risk aversion gained COVID-19. The improving rural demand and return of prominence. Prior to this, the INR vs USD exchange optimism in manufacturing and investment, supported by rate remained range bound in the territory of INR 68.3 fiscal and monetary policy stimulus by the Government to INR 72.2 per USD, impacted by developments around and the RBI, especially the tax reforms, infusion of US-China trade tensions, movement in crude oil prices liquidity, reduction in interest rates and enabling monetary and policy measures announced by the Government for transmission, had created an environment conducive attracting capital inflows. The rupee averaged at INR 70.89 for higher growth. However, the COVID-19 pandemic per USD as against INR 69.91 per USD in the previous drastically changed the scenario. India’s swift response year, registering an average depreciation of 1.4% year on to the situation is appreciated world over, however, the year. The COVID-19 situation continued to put pressure economic cost of lockdowns and containment measures on the INR, which further depreciated to all-time lows in is massive and has to be borne by the economy. While early 2020-21. the stimulus announced by the RBI and Government, With absolute uncertainty around unfolding of the coupled with a benign international crude oil price COVID-19 situation, economic recovery is inundated scenario, is expected to provide some cushion to the with significant downside risks stemming from the falling growth, however, due to the pandemic situation, it migration of labour, fractured and unaligned supply may be severely impacted. chains, suboptimal operations, demand and supply shocks, liquidity crisis especially in the unorganized and The Consumer Price Index (CPI) inflation in the country small scale businesses, and distorted fiscal position. averaged at 4.76% in the year 2019-20 as against 3.43% in the previous year. The headline inflation rose CPI Inflation (2012 Base) consistently month over month and peaked in the month 8 of January 2020 before declining and settling at 5.84% 7 6 in March 2020. The changes in the food and vegetable 5 prices defined majority of the movement in CPI inflation 4 3 during the year 2019-20. Looking ahead, inflation may 2 1 soften in the coming months, as food prices ease further 0 with expected record production and impact of lower prices of crude oil percolate in the economy. However, the Apr-19 May-19Jun-19 Jul-19 Aug-19Sep-19 Oct-19 Nov-19 Dec-19Jan-20 Feb-20 Mar-20
Annual Report 2019-20 55 INR v/s USD Primary Energy Demand Growth % 78 4% 76 3.4% 74 3% 72 70 2% 68 0.9% 0.9% 1.0% 66 1% 64 62 0% AprMayJunJul AugSep OctNov DecJan FebMar AprMayJun -1% -0.6% 2019-20 2018-19 2017-18 -2% On the side of optimism, higher proportion of domestic -1.9% consumption in the economy, demographic dividend, WorldUS China India Europe Rest of the world potential to emerge as an alternate manufacturing hub million barrels per day) in 2019, the third lowest rate in and targeted timely fiscal and monetary policy measures the last ten years. The decline in oil demand in advanced by the Government can cushion the shock and place the economies was more than offset by increase in demand economy back on the growth trajectory faster than many in the rest of the world, led by China and India, though other major economies in the world. demand growth in India was lower than in 2018. Trends in the Oil and Gas Sector Regionally, with 3.4% growth in energy demand, China The Oil and Gas sector has been abuzz with activity claimed the lion’s share (90%) of net global energy and witnessing transformational trends since the past demand growth in 2019, while the European Union and few years driven mainly by growing climatic concerns United States registered a de-growth of 1.9% and 0.6% and technological developments. The world has been respectively. India recorded a growth of just 0.9% in moving faster towards de-carbonization of energy and energy demand, staggeringly lower from 4% in 2018 and electrification of mobility, extensively supported by policy the lowest ever so far, as the economic activity slowed imperatives and capital commitments besides improving and power demand fell, particularly from irrigation quality of fuels and adopting reduced emission norms, and manufacturing. The growth rate in energy demand a remarkable achievement being the implementation of in many advanced economies and major emerging IMO 2020 regulations with effect from January 2020. economies trailed the economic growth rate, as the However, with the world reeling under a severe economic benefits of energy efficiency accrue from technological crisis due to the pandemic, forcing redistribution of developments and switching to low carbon solutions. resources and reshuffle in investment priorities, and with emissions reducing substantially due to reduction in After two years of increase, the global energy-related CO2 energy demand, there is increased uncertainty around the emissions remained almost stable in 2019, contributed pace of transition. by milder weather, improvements in energy efficiency and increasing transition to gas, renewables and nuclear During the year 2019, global energy demand grew by power, offsetting the impact of growth in economic a meagre 0.9%, registering a decline of around 60% in activity. While advanced economies recorded a decline growth as compared to 2018. The slowdown in global in emissions mainly from the power sector, the rest of economy and lesser heating and cooling requirements due to milder weather in some of the major economies Share of Energy Sources (%) contributed to lower growth in primary energy demand. Other The major decline in growth was recorded in coal and Biomass and renewables gas, with the former de-growing by 1.7%, while the latter waste 10% 2% growing by only 1.8%, as compared to a growth of 0.7% Coal 26% Hydro 3% and 4.6% in 2018 respectively. Despite declining for the third time in the past five years, coal still remains the Nuclear 5% second largest source of energy after oil, and the single largest source of electricity. However, for the first time in the year 2019, the electricity generation from low carbon sources - nuclear and renewables - was more than from coal. Renewables recorded the fastest rate of Gas 23% growth at 3.7%, and the highest absolute growth in the year 2019 with double digit growth in both solar and wind Oil 31% power. Oil, including biofuels, grew by just 0.8% (or 0.8
56 Bharat Petroleum Corporation Limited 100 Brent Platt's Dated (USD/bbl) 90 80 70 60 50 40 30 20 10 0 0 0 0 0 0 9 9 9 9 0 0 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 8 8 8 8 8 8 8 8 8 8 8 8 8 8 20 19 20 18 18 -2 -1 -1 -1 -1 -1 -1 c-1 b-20 an an an -Jul-1 -Jul-1 -Jul-1 -O ct -O ct -O ct -O ct -Apr-2 -Apr-1 -Apr-1 -Apr-1 -J -J -J -Feb-2 -Feb-1 -Feb-1 -Jun-2 -Jun-1 -Jun-1 -Jun-1 -Sep-1 -Sep-1 -Sep-1 -Sep-1 -Mar-2 -Mar-1 -Mar-1 -Dec-1 -Dec-1 -Dec-1 -Nov-1 -Nov-1 -Nov-1 -Aug-1 -Aug-1 -Aug-1 -Aug-1 2-Jul-18 -May-2 -May-1 -May-1 -May-1 7-Apr- 3-Apr- 8-Jan-20 7-Fe 6-Jun- 2-Jun- 8-Mar-2 9-De 9-Nov- 1-Aug-18 12 27 17 7-May-20 3-May-18 25 10 30 15 22 13 28 18 23 28 13 22 12 27 21 12 27 17 10 25 15 30 23 14 29 24 14 29 24 14 29 11 26 16 31 22 13 28 18 the world experienced an overall increase; however, the above all, the outbreak of COVID-19 pandemic. During emission growth rate was much lower in India, Indonesia the year 2019-20, the benchmark Brent crude as well as and to some extent in China. the Indian basket of crude oil averaged at around USD 61 per barrel as against USD 70 per barrel for both the The COVID-19 pandemic has the energy sector witnessing crudes in 2018-19. Moving in the range of around USD some extraordinary occurrences, movements and trends. With the worldwide lockdowns and curtailment of activity, 50 per barrel to USD 75 per barrel for almost the entire global energy demand declined; however, the decline year, the Brent crude oil prices collapsed in the month was asymmetrical across sectors. Digital applications, of March 2020, hit by a double whammy of declining residential and healthcare sectors witnessed a surge demand due to the pandemic and overflowing supplies in demand, which was more than offset by reduction due to supply war amongst major producers. This in demand from commercial, industrial and mobility culminated in substantial inventory pile up, both onshore sectors. During the first quarter of 2020 itself, global and offshore, shooting up the freight market significantly. energy demand declined by a shocking 3.8% and CO2 The Brent Crude prices fell to a low of around USD 13 emission levels lowered by an unprecedented 5%. per barrel in the month of April 2020, the lowest in the Moving ahead, the energy demand and emission levels last 20 years. In an unimaginable and unprecedented are likely to remain subdued for a longer period of time slide, the benchmark WTI crude futures, which are widely as the pandemic situation evolves and economic activity tracked and traded especially in the US, fell to a level of normalizes; however, some structural changes are negative USD 37.63 per barrel in erratic trade during mid- imminent with the world realizing the power of climatic April 2020. The prices have strengthened since then as catastrophes and digitalization emerging as a powerful global demand – supply rebalanced with production cuts enabler and even a substitute. by Opec+ in line with the deal clinched in April 2020 and gradual reopening of the global economy. Nevertheless, The international prices of crude oil and natural gas uncertainty continues. continued to be volatile in the year 2019-20 influenced by slowing global economic activity, developments on the During the year 2019-20, the Brent Dubai differential US-China trade war, tensions in the Middle East, Brexit averaged at USD 0.7 per barrel in favour of Brent, as worries, US sanctions on Venezuela and Iran, act of against USD 0.8 per barrel in the previous year. The terrorism in Saudi Arabia in September 2019, changing Brent crude traded at a premium to Dubai crude for most supply side dynamics amongst top oil producers and part of the year with intermittent reversal of spreads Brent-Dubai Differential (USD/bbl) 6 4 2 0 -2 -4 -6 -8 -04-19 -04-19 -05-19 -05-19 -05-19 -06-19 -06-19 -07-19 -07-19 -08-19 -08-19 -09-19 -09-19 -10-19 -10-19 -11-19 -11-19 -12-19 -12-19 -01-20 -01-20 -02-20 -02-20 -03-20 -03-20 -04-20 -04-20 -05-20 -05-20 -06-20 -06-20 16 01 16 31 15 30 15 30 14 29 13 28 13 28 12 27 12 27 11 26 10 25 11 26 10 25 10 25 09 24 01
Annual Report 2019-20 57 Product Prices (USD/bbl) 90 80 70 60 50 40 30 20 10 0
01-04-1916-04-1901-05-1916-05-1931-05-1915-06-1930-06-1915-07-1930-07-1914-08-1929-08-1913-09-1928-09-1913-10-1928-10-1912-11-1927-11-1912-12-1927-12-1911-01-2026-01-2010-02-2025-02-2011-03-2026-03-2010-04-2025-04-2010-05-225-05-2009-06-2024-06-20 Petrol Naphtha Jet / Kero Diesel from premium to discount. This was more pronounced Unlike 2018-19, the MS cracks (Product prices FOB during the period January 2020 to March 2020, when the Singapore minus Dubai Crude) remained positive discount to Dubai crude rose as high as 5.7 per barrel throughout the year 2019-20 except in the second during March 2020. The trend continued in subsequent fortnight of March 2020 when the cracks became negative months with Dubai crude quoting at discount to Brent and touched unprecedented lows of around negative USD crude most of the times. 6 per barrel. The MS cracks averaged at USD 6.7 per In tandem with the crude prices, the product prices barrel against USD 5.9 per barrel in previous year, 14% witnessed high volatility during the year 2019-20, higher. However, the average cracks of Naphtha, Jet Fuel/ averaging lower than the levels of the previous year. Kero and HSD were weaker than the previous year. The Motor Spirit (MS) (Unleaded Singapore Platts) (Petrol) average cracks of Naphtha were negative USD 5.5 per prices averaged at USD 67 per barrel, as against USD barrel against negative USD 4.1 per barrel in the previous 76 per barrel in the previous year while the prices of year, Jet Fuel/Kero cracks averaged at USD 12.6 per High Speed Diesel (HSD) (Diesel) averaged at around barrel against USD 14.6 per barrel in the previous year USD 74 per barrel as against USD 85 per barrel in the and HSD cracks averaged at USD 14.1 per barrel against previous year. The average prices of Naphtha and Jet Fuel USD 15.1 per barrel in the previous year, registering a / Kerosene (SKO) were USD 55 per barrel and USD 73 per decline of 34%, 14% and 7%, respectively. barrel as against USD 65 per barrel and USD 84 per barrel The global oil market, which was already facing challenges respectively in the previous year. due to geopolitical tensions, weaker economic activity, Average Product Prices (USD/bbl) rising energy efficiency, excessive refining capacity and energy transition trends, has further been distressed by 90 the pandemic, amplifying the probability of a much longer 80 70 depressed crude and product price scenario. Responding 60 to the situation, the global oil companies have slashed 50 their capex spends and resorted to cash conservation 40 30 measures to ease off the pressure on liquidity and 20 profitability and effectively serve their debt obligations. 10 On the geopolitical front, with the emergence of US as 0 Petrol NaphthaJet/KeroDiesel a strong influencer while Saudi Arabia – Russia relations run hot and cold, the global crude market is seeing a 2016-17 2017-18 2018-19 2019-20 subtle shift in the fulcrum of dominance. Petrol Cracks (USD/bbl) Naphtha Cracks (USD/bbl) Jet/Kero Cracks (USD/bbl) Diesel Cracks (USD/bbl) 20 5 20 20 15 0 15 15 10 -5 10 10 5 5 -10 5 0 0 0 r n l g p v c n b r l -15 n l g p t v c n b r ct l t n g p ct v c n b pr Ju n g p v c n b -5 Ju Ju Ap Ju Au Se O No De Ja Fe Mar pr Ap Ju O Ja Fe A Ju Au Se Oc No De Ja Fe Ma May A Ju Oc May Au Se No De Mar May May Ju Au Se No De Ja Fe Mar 2019-20 2018-19 2017-18 2019-20 2018-19 2017-18 2019-20 2018-19 2017-18 2019-20 2018-19 2017-18
58 Bharat Petroleum Corporation Limited Refining Capacity & Crude Oil Crude Imports Processing (MMTPA) 250 80 Indian 260 70 Exchange Rate & e 200 60 Crude 240 150 50 & Valu 40
100 30 Basket 220 20
Volume 50 10 200 - - 2015-162016-17 2017-182018-19 2019-20 2015-162016-17 2017-182018-19 2019-20
Refining Capacity Crude Oil Processing Volume MMT Value USD bn Exchange Rate INR/USD Indian Crude Basket USD/bbl Indian Petroleum Sector 34.2 MMT in the previous year. The output from ageing fields continued to decline, coupled with operational For a country which is the third largest consumer of issues encountered in some of the fields during the year. oil after the US and China, and which imports around 85% of its requirements every year, a low and stable oil India’s refining capacity leads consumption of petroleum price regime is a boon. Capitalizing on reduced foreign products by a significant margin, positioning it as a net exchange outflow on account of a lower oil and petroleum exporter, with exports to the tune of around 25% of the product import bill, which constituted more than 25% total production in 2019-20. With no major capacity of the country’s total import bill in 2019-20, India gets addition in the past two years, the country’s refining enough leg room to constructively manage its balance of capacity has been almost static and was at 249.9 MMT payments, fiscal and monetary policy situation. However, as of 1st April 2020. During the year 2019-20, the country as the COVID-19 pandemic throttles economic activity, processed around 254.4 MMT of crude, as against 257.2 the low oil prices offer little respite. The countrywide MMT in the previous year, with PSUs and their group lockdown, which started in the last week of March 2020, companies contributing 65% of the total processing. The contracted the consumption of petroleum products domestic refineries processed around 76% high Sulphur by around 18% during the month itself and moderated crude during the year. the full year consumption growth to negligible levels. As the pace of economic growth slowed in 2019-20, Consequently, the year 2019-20 ended at around 213.7 the consumption of petroleum products ended almost MMT as against 213.2 MMT in the previous year. The flat at around 213.7 MMT, as against 213.2 MMT in natural gas consumption grew by around 5.5% during the the previous year. Diesel, which constituted 39% of the year 2019-20, as against 2.8% in the previous year due total consumption of petroleum products in 2019-20, to increased adoption of gas in the country supported by registered a de-growth of 1%, while Petrol and LPG, reduction in international LNG prices. which constituted 14% and 12% respectively grew by 6% With crude oil imports remaining static, oil prices each. averaging lower than the previous year and the INR The country’s flagship PMUY initiative, aimed at promoting depreciating marginally against the USD during the year cleaner cooking fuel and ensuring good health of women, 2019-20, the country’s crude oil import bill reduced by particularly in the rural areas, saw achievement of the around 9%, from USD 111.9 billion in the year 2018-19 to USD 101.4 billion in the current year. While the country Consumption of Petroleum Products imported around 227.0 MMT of crude oil in the year 2019- 20, as against 226.5 MMT in the previous year, the price Others 14% of the Indian crude basket averaged at around USD 61 ATF 4% per barrel as against USD 70 per barrel, a decline of 13% Diesel 39% Naphtha 7% against the previous year. The Indian Rupee averaged at INR 70.89 per USD in year 2019-20 as against INR 69.91 per USD in the previous year, a depreciation of 1.4%. Petcoke 10% The indigenous crude oil production, which is less than 1% of the global oil production, declined for the eighth LPG 12% Petrol 14% consecutive year in 2019-20, falling 6% to 32.2 MMT from
Annual Report 2019-20 59 target of 8 crore LPG connections by the first week of requirements and aspirations. The country has formulated September 2019, seven months ahead of schedule. With a lofty Energy Vision propped on the four pillars of Energy this, the LPG active consumer base has increased to 27.9 Access, Energy Efficiency, Energy Sustainability and crore consumers as of 31st March, 2020, leading to more Energy Security with Energy Justice as an integral part than 97% coverage in the country. The fringe benefit of of the overall objective. Ambitious targets have been set the initiative in supporting the needy in current times of across all pillars with particular mention of promotion of socio-economic trouble was realized as the Government gas based economy, increase in biofuels, diversification of announced provision of three free refills in three months sources of crude oil and natural gas, transition to electric with effect from April 2020. This will also give a fillip to the vehicles and enhancement of renewables capacity. They Company’s efforts to enhance the usage of LPG amongst are being pursued with all-out efforts and the country is PMUY consumers, which is necessary for sustainability progressing well towards achieving them. of the scheme. Opportunities and Threats Bearing testimony to the nation’s commitment towards Energy has been instrumental in ushering in all a greener and cleaner environment, BS VI fuels (petrol developments in the modern world. As important and and diesel), equivalent of Euro VI grade, were rolled out st major constituents in the energy basket, Oil and Gas across the country on the scheduled date of 1 April have played a key role in energizing the lives of millions 2020. Leapfrogging from extant BS IV standards, in just of people around the globe and kept the wheels of the three years, India joined the elite club of select nations of world economy moving for centuries now. In recent the world using such cleaner fuels. times, growing climatic concerns and technological In a landmark move aimed at improving customer service developments have compelled focus on and accelerated levels and augmenting the retail network, particularly efforts towards de-carbonization of energy, thus building in rural areas, the Government revised the 17 year old expectations of fossil fuels running out of favor sooner guidelines for marketing of transportation fuels, relaxing than later. However, with expectations of softer crude oil the rules and lowering the entry barriers, thereby price regime, reduced CO2 emission levels due to muted encouraging participation of private and foreign players economic activity and changes in consumer behavior, oil in the sector. The move will enhance competition in the and gas are expected to continue fueling the world longer industry and drive efficiencies, enhance customer service than expected earlier. and ensure deeper penetration of retail outlets. The ongoing pandemic has brought the world almost to a Towards the objective of making India a gas based standstill, pushing it back by many years. As economies economy, enhancing contribution of gas in the energy across the world rise in their battle against the pandemic, basket from current levels of around 6% to 15% by 2030, economic activity and demand is expected to revive; the Government has taken many visionary steps. These however, it will take some time for it to even return to the include promoting creation of necessary infrastructure previous levels. Any increase in severity of the pandemic like City Gas Distribution (CGD) networks, Gas grid, will be disastrous for health and economy. India is likely to LNG terminals, allotting “Public Utility” status to CGD bounce back quicker than most of the major economies and incentivizing adoption of gas through prioritized in the world, riding on its demographic dividend and high allocation of cheaper domestic gas for households and domestic consumption. Nevertheless, the economic cost transportation. The Geographical Areas awarded in the 9th of lockdown is severe and unsettling. In these difficult and 10th bidding rounds of CGD networks are in various times, companies need to take an introspective approach stages of progress and once operational, would cover for eliminating redundancies, improving efficiencies and around 70 percent of India’s population and 53 percent optimizing spends to sail through the turbulent waters of the geographical area. The National Gas Grid has and at the same time adapt to new market conditions to been planned to be expanded to 27,000 KMs from the continue to serve its customers. present 16,200 KMs for wider integration of gas sources The volatility in international prices of crude oil have to consumption hubs. a profound impact on the socio-economic situation Over the years, the country has implemented several of an import dependent country like India. A low oil reforms and taken various initiatives towards overall price scenario, like the one prevailing now, creates an economic progress and development and in particular, environment conducive for growth and development for the oil and gas sector, keeping pace with the without constraining the economy and finances. changing market dynamics, emerging trends, country’s However, depressed product cracks have jeopardized
60 Bharat Petroleum Corporation Limited the refining margins and posed a serious threat to the particularly, the plastics, on health and environment, profitability of the sector, which is already under pressure needs to be addressed through behavioral changes, due to demand decline. regulatory provisions, technological upgradation, As the world and the country embraces and pursues better handling and disposal and recycling, to ensure Energy Transition, it creates both an opportunity and a sustainability and scalability. The oil and gas companies threat for the oil and gas sector. While the threat ascends need to recalibrate their strategies and plan the capital in the form of reduced demand and consequent decline investments appropriately to include petrochemicals as in business, the opportunities manifest in the form of a critical component of refining reconfigurations and diversification and progression from Oil and Gas to expansions and an important constituent of their product Energy. With more than 50% of the total petroleum basket. product demand emanating from the transportation Towards achieving crude oil import reduction, extending sector, the growing electrification of mobility is likely to financial support to agriculture sector, addressing decelerate the demand of transportation fuels, particularly environmental concerns, particularly emanating out of in personal and shared mobility. However, demand in indiscriminate burning of stubble and converting waste segments like commercial vehicles, LPG, industrial, to energy, the country has taken various policy initiatives commercial and marine fuels and petrochemicals will to promote Biofuels like Compressed Bio Gas, 1st and continue to keep the sector live. On the other hand, it also 2nd Generation Ethanol and Used Cooking Oil based Bio provides an opportunity for the oil marketing companies diesel and set ambitious targets to increase their blending to spearhead the transition and offer battery charging percentage into transportation fuels. Oil Marketing solutions dwelling on their extensive presence and vast companies are supporting and pursuing these initiatives infrastructure. The global trends in adoption of EVs, policy towards greener fuels, thus ensuring achievement of incentives and technological developments reducing total national objectives along with profitable and sustainable cost of ownership need to be closely monitored. growth. However, availability of funds at competitive rates As the country progresses towards its target of scaling for the projects, evolving technology and low crude oil up renewable energy capacity, backed by policy price regime pose challenges for viability and scalability incentives and technological developments, there has of such green initiatives. been a consistent increase in the share of renewable Natural Gas being a cleaner and greener fuel has seen energy sources in power generation, with generation extensive acceptance and adoption across the world. The capacity standing at more than 23% now. However, natural gas market in the country is poised for accelerated for it to become a critical part of the country’s energy growth in making India a gas based economy, presenting mix, continued capacity creation, development of grid itself as a natural diversification for oil companies and a infrastructure and finding low cost solutions to the necessary hedge in the product portfolio. An early and problem of energy storage and performance consistency widespread adoption of natural gas, however, hinges on are imperative. Nonetheless, renewable energy presents faster creation of gas infrastructure, taxation and pricing an exciting opportunity for the companies to offset their reforms and incentivizing switchover to gas. To enhance carbon footprints and contribute to cleaner and greener the share of LNG in transportation sector, automobile environment. manufacturers need to keep pace and roll out LNG driven With oil and gas demand likely to decrease due to commercial and personal vehicles as the gas marketing increasing adoption of electric vehicles and rise of infrastructure grows in the country. renewable energy, Petrochemicals present themselves as Risks, Concerns and Outlook a counter balance to the Oil and Gas industry. Globally, oil and gas companies are increasingly pursuing integration The current pandemic situation has put the world in a along the petrochemical value chain. The new age crude- tight spot inflicting substantial damage to human lives, to-chemicals process offers an opportunity to delink economies and business and consumer confidence petrochemical production from conventional intermittent across the world. With the pathway of the pandemic refining/processing. India, which consumes roughly one uncertain and proven remedy not being available, there fourth of the world’s average of petrochemicals on a are significant downside risks and serious concerns per capita basis, is likely to see a surge in demand as around economic revival and resumption of activity, the standards of living improve, consumption rises and so much so that even the targeted stimulus packages the country progresses towards becoming a developed handed out by the governments across the world may economy. However, harmful effects of petrochemicals not be sufficient to reinvigorate the ailing economy faster.
Annual Report 2019-20 61 Negative surprises on the pandemic can deteriorate the energy transition plans as hinted by global oil and gas condition with even more loss of lives, numerous business majors, and consumer behavioral changes driving down closures, widespread poverty and unemployment, further the demand for transportation fuels. On the other hand, a increase in income inequality, deterioration in the law low oil price regime, healthy demand expected from the and order situation and precipitation of a sovereign debt petrochemicals sector and reduction in emissions due to crisis, particularly in smaller and weaker economies. In subdued economic activity may push the oil plateau by the event that the pandemic is contained in time without some more years. Besides, the trends in energy transition any relapse, central banks and governments stand will depend upon an interplay of a number of other resolute with their reform agenda and the benefit of the factors like technological advancements driving cost stimulus packages reach the targeted sections quickly, competitiveness of substitutes, increasing efficiency of the economies can turn around faster and tide over the the ICE engine, oil market dynamics, Government policy wave. Nevertheless, the global economy is likely to feel choices and decision on subsidies, particularly in the the after effects of the pandemic for a longer time and it current scenario of constrained finances, and investment will take a while for demand to return to normal levels. priorities of companies and consumers. Nevertheless, A low international crude oil price regime bodes well Energy Transition continues to be included in both - the for the Indian economy which imports around 85% of its risk registers as well as strategy documents of the oil and requirements and pays the price in foreign currency. It gas companies across the world. helps in controlling inflation, managing the current account The domestic oil and gas market is set to witness and fiscal deficit situations and containing input costs enhanced competition with low entry barriers and for many industries and sectors. However, some of the existing players enhancing their activities. While a benefits of low prices get offset with depreciation of the competitive market promotes efficiency, innovation, Indian Rupee against the US Dollar, which has been the quality and enhanced customer value, it also constrains case recently owing to global economic turmoil caused by industry margins, increases vulnerability and reduces the pandemic. Also, a significant increase in freight rates predictability in earnings of the market players. As the and insurance premiums, due to Middle East disruptions, sector faces multiple pressures, the marketing strategies the recent pandemic situation and excessive floating of the oil and gas companies need to be realigned to the inventory, has increased the landed cost of crude oil. emerging reality and the corporate culture be infused with The significant erosion in oil and gas demand and high agility to tackle the dynamic environment. volatility in prices have distressed the profitability and The pandemic has reinforced the importance of Health, liquidity position of oil and gas companies across the Safety and Environment and repositioned them as the world and led to spending cuts, postponement of capital topmost priority for the society and business, as any investments and reduction in shareholder dividends, as slippage on this account can be catastrophic to lives and cash conservation takes precedence. Going forward, assets. A healthy and motivated workforce, safe working rate of economic revival, developments on the global conditions which now need to be pandemic ready and geopolitical front particularly the US-China tensions and environment friendly operations ensures sustainability Middle-East stability, and demand-supply rebalancing with profitability. To mitigate the risks, safety needs shall have substantial impact on oil and gas prices. With to be instituted as a culture through constant end user demand expected to remain muted in the near future education and zero tolerance for non-compliance of the and crude oil prices likely to be volatile as the pandemic standard operating and safety procedures, along with situation evolves, the domestic oil refining and marketing safe upkeep of equipment, information and data. companies face significant profitability pressures due to Inadequacy of infrastructure remains a serious concern truncated operations, lower product cracks and incurrence for an aspiring economy like India. While demand of of inventory losses and fixed costs. Appropriate spend petroleum products have grown at a considerable rate optimization measures, efficiency enhancement efforts over the years in the country, the infrastructure has and prioritization of capital expenditures would be required not undergone commensurate expansion, leading to to ride out these turbulent times with minimal impact. inadequacies, deficient growth and opportunity losses. The debate around Peak of Oil and pace of energy As the country treads the growth path and oil and gas transition has once again gathered momentum against demand increases, robust infrastructure would be the backdrop of the pandemic. A case in favour of an early required to support the progress and development and maturity of the oil industry stems from a bleak outlook of ensure energy justice, access and efficiency. A focused oil demand, renewed environmental concerns, on-track and targeted approach is needed to augment the road,
62 Bharat Petroleum Corporation Limited port, pipeline, storage, processing and distribution but also to identify and capitalize on the new unfolding infrastructure to foster efficiencies, harness the growth opportunities. With its professional management, total potential and capitalize on sudden opportunities like the customer focus and robust governance systems, as one that emerged in the form of crashing crude oil prices always, BPCL is poised to rise above the challenges and low demand. and establish itself firmly at a higher level. As the The importance of Digitalization cannot be company prepares for historic transition in its ownership overemphasized in the current times, as the crisis shapes structure, it is expected to unlock tremendous value by the operating and interacting norms across the world, way of enhanced professionalism, access to advanced impacting the demand for aviation and transportation technologies, newer global market, a diversified product fuels. However, as a key component of corporate DNA, portfolio and improved availability of resources and the case for digital proliferation in organizations has further capital, and create significant value for all stakeholders. strengthened, particularly in the Oil and Gas sector which PERFORMANCE has seen limited digital adoption. The new age digital Refineries technologies have potential to significantly drive cost optimization, enable efficient asset creation, operation, Although the year 2019-20 was a very challenging year, maintenance and management, enhance predictability in BPCL’s two refineries, Mumbai and Kochi achieved upstream assets, improve yields, streamline processes, the highest ever refinery throughput of 31.91 MMT as deliver integrated and intelligent information, redefine against the previous best of 31.01 MMT in 2018-19. human resource interface, reshape customer experience BPCL achieved a Gross Refining Margin (GRM) for the and effectively manage recording and compliances. year 2019-20 at USD 2.50 per barrel (`4182 Crores) as compared to USD 4.58 per barrel (`7319 Crores) India has led the world in economic growth in recent realized in the year 2018-19. BPCL achieved the lowest years and is expected to be the growth leader of the world ever Specific Energy Consumption of 66.0 (MBTU/Barrel/ in the next few decades, emerging as one of the world’s Energy complexity factor) MBN in 2019-20 compared to top three superpowers. The country has undertaken 68.6 MBN in 2018-19 through implementation of various massive structural and policy reforms to promote growth, Energy Conservation (Encon) Schemes. ease of doing business, competitiveness, inclusiveness, digitalization, entrepreneurship and Make in India, attract With an increase of over 2.9% in the refineries throughput foreign investments, augment infrastructure, strengthen over the last year, they produced the highest ever corporate governance, bolster the banking and financial products (MS, HSD, Propylene, Hexane and Lube Oil Base sector, perpetrate an efficient tax structure and enhance Stock) albeit having the challenge of producing upgraded India’s image in the international arena. The current crisis products like Very Low Sulphur Furnace Oil (VLSFO), has put the country in a sweet spot to emerge as a Global BS-VI MS and HSD. To improve margins, the refineries Factory as the world searches for alternative places in adopted several measures such as optimum capacity Asia for setting up business. With the country embarking utilization of both primary & secondary processing on its Self-Reliant India Mission, the Government has units. For the first time, annual turnaround of process emphasized and encouraged entrepreneurs to boost local units and catalyst replacement were carried out during production, improve quality standards to international the monsoon season, which is the lean demand period. Kochi Refinery (KR) was the first PSU oil Refinery in India levels, enhance efficiency and promote local goods. th Though a slew of reforms have been announced in this to export VLSFO (15 TMT) on 7 February, 2020. direction, there is more scope and a need to strengthen As part of its Integrated Management System, surveillance execution and timely percolation to the targeted sectors. audit and recertification of both the refineries were As the world stands on the threshold of a new reality completed for conformance to the new standards of ISO brought about by the pandemic, and India strengthens its 9001:2015 and 14001: 2015 for Quality, Environment & resolve to overcome the virus and revive the economy, Occupational Health and Safety Management Systems. BPCL is fully seized of the various dimensions of this Many activities were done and some are in progress new normal and is set to leverage the new horizons to improve the awareness and strengthen the Quality which would emerge. Exhibiting agility and resilience Management System (QMS) system. and with concerted focus on risk matrix and resource BPCL’s Quality Control (QC) laboratories have always management, BPCL is evaluating the various facets of this strived to maintain the highest quality standards to transition, and has put in place appropriate strategies and comply with the norms set by reputed external certified plans to not just overcome the impact of this disruption, agencies and accreditation bodies. Both the refinery
Annual Report 2019-20 63 laboratories maintained their performance and continued of various Process Units in all 3 rotating shifts at MR for to perform excellently in the international laboratory the first time. BPCL has always invested in learning and proficiency testing scheme. QC received approval from development. Throughout the year, a series of training Bureau of Indian Standards (BIS) for testing competency programs and learning initiatives based on individual and and product quality for specialty product, Food Grade organizational needs were implemented for employees to Hexane. A state-of-the-art petrochemical laboratory was engage in and enhance their skills, both in the technical constructed as part of PDPP project in the Centralized domain as well as Visionary Leadership workshops, Quality Control Laboratory at Kochi. Team Building Outbound programs, etc. During the year, focus was on developing and imparting emerging skills During the year, various digital initiatives were taken in the which the organization needs in the coming years. The refineries thereby achieving good progress in the areas Company has also offered in-house technical expertise to of the industrial internet of things, machine learning, external organizations from both within India and abroad. artificial intelligence, etc. For the first time ever, a digital New learning methodologies such as e-learning modules, enabled turnaround was carried out in the CDU-4 unit case studies etc. were also introduced during the year. of MR in collaboration with the startup companies. First of its kind, the digitally enabled Gasoline Treatment Unit RETAIL (GTU) in MR has helped in faster commissioning of the Indian petroleum retailing, including the private sector in unit enabled faster collection, processing, and action the year 2019-20 registered negative growth of (0.2%), on daily performance plant data. Wireless transmitters whereas the retail business of Public Sector Oil Companies installed on every pump helped in continuous monitoring (PSUs) registered negative growth of (1.6%). The market and improved reliability. Other initiatives like smart share of PSUs in Indian petroleum retail dropped from parking, drone based inspection, digital twins, robotic 91.1% last year to 90.1% this year. The year 2019-20 process automation, etc. were carried out in the refineries witnessed the impact of economic slowdown, aggressive to leverage the latest digital technologies available and network expansion by private players and the effect of generate significant value. COVID-19 in the last quarter. All these resulted in negative The refineries have a well established effective Energy growth in sales volume. By focusing on customer-centric Management System (EnMS), accredited with ISO initiatives in existing markets and prioritizing network 50001:2011 certification and activities for migration to expansion in less represented markets, the Retail Strategic ISO 50001:2018 have been initiated. There have been Business Unit (SBU) avoided major volume erosion. numerous efforts for optimizing plant operation and The Retail Business recorded total market sale of 26.96 implementing energy conservation schemes across the MMT. The sales volume of MS at 7.79 MMT was 5.1% refineries. These relentless efforts have brought down the higher over previous year 2018-19. HSD sales volumes Specific Energy Consumption to 62.5 MBN in 2019-20 as stood at 18.37 MMT, witnessing negative growth of compared to 64.5 MBN in 2018-19 at MR and 68.5 MBN (3.0%). In the alternate fuels segment, BPCL recorded in 2019-20 as compared to 71.5 MBN in 2018-19 at KR, growth of 7.2% on the sale of Compressed Natural Gas their lowest individual values ever. (CNG) with sales volume for the year being 475 TMT. BPCL refineries have always given priority to care for Auto LPG registered negative growth of (6.8%) with a the environment and its protection. The refineries have sales volume of 28.58 TMT. Government policy linked already incorporated pollution control measures in SKO sales stood at 297 TMT, with de-growth of (38.1%). their design itself and they always strive to enhance With focus on providing environment friendly fuel facilities sustainability and efficiency by exploring avenues of at Retail Outlets (ROs), CNG was commissioned at 114 sustainable developments. All the conventional lights in ROs during the year 2019-20. Sales of premium branded MR were replaced with energy efficient LEDs resulting in fuel, ‘Speed’ were 308 TKL with a conversion of 2.8%. huge savings. Other initiatives like rainwater harvesting, During the year, 1447 new retail outlets were sewage treatment plant, solar power plant, hazardous commissioned by BPCL, the highest ever in a financial waste management, etc. were taken in both the refineries year amongst PSUs, 571 of which were in key priority during the year. Various other “Go-Green Initiatives” rural markets. 17 Company Owned and Company have also been implemented across different parts and Controlled (COCO) Outlets and 6 One Stop Trucker and functions of the refinery. Shops (OSTSs) Outlets were commissioned during the People are the greatest resource in BPCL. Breaking the year. The total number of retail outlets at the end of 2019- gender wall, 11 Women Officers have taken the charge 20, taking into account those newly commissioned during
64 Bharat Petroleum Corporation Limited the year and those decommissioned, stood at 16,234. from home.’ These outlets, in addition to conventional 174 ROs were revived towards creating a healthier and services, offer premium loyalty services under the brand more effective network. ‘SmartFleet’ for fleet customers, a customer care center, BPCL has 5,710 Pure For Sure (PFS) ROs and 1,555 PFS truckers’ air gauge, greasing facility, driver rest rooms Platinum certified ROs. The certifications are carried out and secured parking. During the year 2019-20, in order to by a third party inspection agency for maintaining the bring assurance to the highway customers, the Retail SBU launched an Integrated Payment Solution at all OSTSs and business promise of trust, efficient fuelling and courteous select Highway ROs. BPCL retail automation integrates service. The ‘NextGen PURE FOR SURE’ initiative was credit / debit card payment and loyalty transactions of launched in Delhi, Kolkata, Mumbai, Bengaluru, Chennai customers. and Hyderabad, covering 530 ROs. These ROs display new retail visual identity, featuring technology led brand In an attempt to reach a step closer to the customer, positioning. These ROs leverage best-in-class technology the mobile app, ‘SmartDrive’ was enhanced for a more for receipt of products into ROs, using geo-fencing user-friendly experience for the ever growing population technology in Tank Lorries (TLs). The ROs have adopted of mobile users. To increase digital transactions at ROs, digital payment integration of fuelling through automation, additional features were brought into the SmartDrive which is the ultimate measure towards customer trust Mobile App for urban customers. The Retail SBU enrolled and transparency. 3.94 Lakh urban customers in the BPCL SBI co-branded credit card program, taking the card base to 5.78 lakhs BPCL provided financial inclusion services at 6,631 and making it the fastest growing co-branded credit ROs through Fino Payments Bank. BPCL has partnered card in the country. The Company offered multiple with Fino Payments Bank, which offers Business options like mobile, email, website and callcenter to stay Correspondent (BC) services, which include Aadhar- connected with the customers and dealer network. Apart enabled Payment System (AePS), Micro ATMs, Domestic from these, the Retail SBU also conducted fortnightly Money Transfer, Content Management System and Bill customer connect campaigns, Ghar Utsav at all OSTS Payments. In the rural market, these are offered under ROs to bring synergy and improve engagement with all the ‘Umang’ brand across 3,761 select ROs. These ROs the stakeholders. The Retail SBU launched a Quick Oil also offer Government to Citizen Services through online Change proposition, “Mak Quik” across 4,372 ROs for portals. Fino BC services generated Gross Merchandise increased convenience of two wheeler customers. Value of ` 2,120 Crores through the BPCL retail network. The Retail SBU launched a Driver Insurance Scheme BPCL has 150 “In & Out” convenience stores, 121 Quick giving Accident Insurance Benefits of ` 3 lakhs to drivers Service Restaurants through alliances with food brands and ` 1.50 lakhs to helpers. In 2019-20, 7.54 lakh drivers and “Ghar Dhabas” for the trucking community. Money and helpers were enrolled in the scheme. transfer, Two-wheeler insurance, Energy Efficiency In an endeavour to support its frontline resources, 34,250 Services Limited (EESL)’s LED appliances, Mother Dairy Driveway Salesmen (DSMs)/ Tank Lorry (TL) crew were and Amul products were offered across select ROs. enrolled into the Bharat Arogya Yojana Medical Insurance Towards environment protection, a new product named scheme and 12,994 DSMs/TL crew were covered under ‘Adblue’ has been made available at 496 outlets for new the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) generation Heavy Commercial Vehicles. (pension scheme). BPCL has certified 20,518 DSMs/TLs With 13,308 ROs equipped with Auto-RSP facilities, crew under the Recognition of Prior Learning-4 program digital transactions in BPCL ROs increased to 32.42% of the Government of India. in March 2020 from 28.41% in April 2019. With tie-ups To enhance the automation system capabilities, the Retail with wallet companies/National Payment Corporation of SBU introduced wireless Forecourt Controller (FCC), India (NPCI), monthly Unified Payments Interfaced (UPI) Android based Electronic Data Capture (EDC) terminal, an transactions increased to ` 137.67 Crores in March 2020 Integrated Payment solution and unique cloud architecture from ` 7.49 Crores in April 2019. in the automation landscape, the first among PSUs. All BPCL has 310 COCO outlets, including 150 OSTSs, where the Multi Product Dispensers (MPDs) are updated with customers experience superior quality and a wide array of the highest security level features for stamping/e-cards services that are expected of a model outlet. The signature replacement. The Retail SBU strengthened the Vapour brand of COCO outlets on highways, i.e. the OSTSs, Recovery System (VRS) type Stage II and Stage IB at 103 are strategically positioned on major highways to give ROs of National Capital Territory of Delhi (NCT) and 455 transporters and drivers an experience of ‘a home away ROs of National Capital Region (NCR).
Annual Report 2019-20 65 In the year 2019-20, under MOP&NG’s initiative of profitability at the same time. This has been made possible “Door-to-Door HSD delivery” service, the Retail SBU with the SBU’s undivided focus on appropriate pricing commissioned 118 Bowsers under the brand name interventions, sales of high margin products, registering “FuelKart”, the highest among PSUs. Under this initiative, growth in the refinery economic zone, scanning value customers having heavy stationery equipment/machinery, driven market opportunities and optimizing logistics get diesel at their doorstep through Geo-fencing/OTP costs. enabled Bowsers. The SBU focused on seamless customer service Towards the Clean Energy mission, a pilot project was through automation and digitalization, thereby offering launched for battery swapping facilities at 6 ROs in Kochi the best value for customers. The SBU renewed its long and Lucknow. An MOU has been executed with M/s. REIL term customer relationship with major Corporates by (a Public Sector Enterprise) for setting up EV charging signing MoUs through a consistent approach of treating stations. customers as valued partners in its growth journey. Overall 47 major MoUs were signed in the year 2019-20. BPCL has developed the Corporate Safety Management Framework (CSMF) including the Life Saving Rules With a clear focus on Diesel as a growth driver for the and Technical Guidelines for ensuring the highest SBU, I&C exceeded the milestone of 1500 TMT sales level of safety standards. In response to the COVID-19 of Diesel, the highest in the past 7 years. The MoU pandemic, comprehensive Standard Operating Practices with Karnataka State Road Transport, one of the major (SOPs) were issued to all ROs in line with the Central/ customers with volume of 500 TMTPA of Diesel, was State Government directives. All DSMs and RO staff renewed for a period of 1 year. compulsorily wear masks. Sanitizers are made available During 2019-20, I&C commissioned 68 Consumer on the forecourt for the use of DSMs & DSWs. DSMs / Pumps for its customers across the country covering DSWs are advised to maintain minimum 2 meter distance various sectors like mining, industrial, State Transport from each other and from customers. Digital payments Undertakings and Defence over varied geographies. The by customers are being encouraged in order to reduce focused strategy on adding value to the customer and currency handling. BPCL has introduced SmartDrive with improving ease of operations by installing consumer QR code facility and APOS (Android Point of Sale) to pumps led to the improved bottom line for the Diesel promote touch-less payment. business. During the year, I&C sold 1502 TMT of Diesel to Direct Customers, which led to the market share To reduce environmental pollution and improve air quality, improvement of 0.35% amongst PSUs and a growth of all marketing installations, depots and retail outlets were 1.14%, the best amongst all PSUs. converted for handling BS-VI grade auto fuel, which was rolled out from 1st April 2020. BPCL achieved ethanol Taking a leap in its focus on trading activities, the SBU blending of 4.22% during the year 2019-20. forayed into trading of Petrochemicals by importing and selling Butyl Acrylate to major customers in the paint To improve the operational efficiency of supply locations, sector. Commencing sales of Bitumen sourced from a Retail Auto Invoice System (RAIS) was implemented importers at 7 ports to meet the growing demand of in 72 locations resulting in efficient usage of resources. the infrastructure sector was another feather added to BPCL also implemented Electric Mechanical (EM) locks the trading portfolio. The I&C SBU also traded imported across 40 locations covering about 7,000 TL, achieved Furnace Oil at Ennore to feed the southern region. 96% visual identity on 10,439 TLs out of targeted 10,878 TLs and achieved automation and interlock uptime of over Grabbing opportunities arising out of the changes in 98% across India. the global market of bunkering, I&C launched VLSFO in the market, meeting IMO 2020 specifications from both INDUSTRIAL AND COMMERCIAL (I&C) Mumbai and Kochi and gained an indomitable position During the year 2019-20, I&C SBU recorded domestic quickly. Solvent D 80, a niche product in the household sale of 6.18 MMT and registered high growth of 7.5% insecticide and specialized coating segment, has also against de-growth of (0.9%) in the Industry, following the been added in the I&C portfolio. trend of the previous year. The SBU also increased its The year stands out in I&C’s journey of technological domestic market share amongst PSUs in an extremely advancement with a number of digital initiatives taken competitive market to 18.4%, a significant jump over the to improve internal processes and create an improved previously reported market share of 15.6%. customer experience. These include analytical In a highly competitive business landscape, the SBU dashboards, consumer stock tracking and upgrading has been able to register volume growth and improve features of mobile applications for faster market response.
66 Bharat Petroleum Corporation Limited The SBU has further enhanced its logistics capabilities stations. During the year, BPCL also commissioned 4 and has achieved a major milestone this year. Through CNG stations in Yamunanagar and 5 in Saharanpur CGD its logistics initiatives like product exchange with OMCs, GA. Besides, 68 CNG stations were commissioned at I&C has achieved significant cost and freight optimization BPCL Retail Outlets other than the above GAs. along with improved customer satisfaction. LUBRICANTS Buoyed by the unparalleled growth achieved by the SBU The Indian lubricant market is the world’s third largest in this year and the performance of past years, I&C now growing market. As per Petroleum Planning and Analysis looks forward to moving ahead with renewed vigour for Cell (PPAC)’s report, India consumed 3,640 TMT of new opportunities that the future can offer, even in the lubricants in the year 2019-20 and it is expected to grow most challenging times ahead. by 2.8% in the year 2020-21. The industry is made up of GAS over 30 players, thus making the lubricant industry highly competitive. The Gas SBU handled 1,700 TMT of Gas in the year 2019-20. Out of this volume, 318 TMT of Gas was Over the years, MAK Lubricants has established a well- supplied to MR and 601 TMT to KR to meet their internal entrenched position in the automotive and industrial requirements. The remaining 781 TMT of Gas was segments. The marketing of MAK Lubricants is mainly supplied to various customers in Fertilizer, Power, City through Retail Outlets, Bazaar network, Authorized Service Gas Distribution (CGD), Steel and other industries across Stations, industrial and institutional customers. Apart the country. from domestic markets, MAK Lubricants has expanded its footprints in other countries and is establishing itself During 2019-20, BPCL enrolled three new LNG customers as a reliable brand in international markets. Through for supplies through Tank Lorry, including the prestigious aggressive marketing at the ground level, MAK Lubes ISRO (Propulsion Unit), Mahendragiri (Tamil Nadu). ensured a spectacular performance in the year. It gained These customers are expected to take around 300 MT of market share of 5.4% among PSUs, with total market LNG every year. Although currently in terms of volumes, share of 21.1% among PSUs. the share of the Tank Lorry LNG segment is limited, it is set to increase over a period of time with forays into In the 16,234 BPCL retail outlets, the focus remained on another technological segment i.e. L-Compressed Natural generating secondary sales at the forecourt. Initiatives Gas (CNG) Stations, which would be supplying gas to like Quick Oil Change (QOC) machine with focus on rural the neighbouring areas that are currently away from the ROs, product-specific campaigns, Below-The-Line (BTL) vicinity of the pipeline. BPCL is undertaking its first pilot activities, Digital Mobile App, etc. improved visibility project of a L-CNG Station in Aurangabad (Maharashtra). and awareness of the brand and offered a unique value proposition to customers. Through various initiatives BPCL, through its wholly owned subsidiary Bharat Gas and a strong presence in social media, the Lubes SBU Resources Ltd (BGRL), is planning to put up a LNG enrolled over six lakhs customers in the MAK QUIK app. Regasification Terminal along the east coast of India. The In the Bazaar channel, retailers and mechanics are vital BPCL Board has accorded its approval for going ahead influencers. Many customized programs for mechanics with the Regasification Terminal. The detailed feasibility such as mechanic training, mechanic engagement study for the same has been completed. program and ground-level activities were conducted. Financial closure has been achieved for all 13 Geographical To cope with the market requirement, the Lubes SBU Areas (GAs) under the 9th and 10th CGD rounds, won introduced new products, which helped the SBU to through its subsidiary BGRL, and necessary documents capture niche segments. New distributors were appointed have been submitted to Petroleum and Natural Gas to strengthen the network pan-India. Regulatory Board (PNGRB). BPCL CGD projects have In the Direct channel, the demand for Industrial lubricants been progressing in full swing to ensure completion of is observed to have a strong correlation with the Index targets as committed by the Company. The total capital of Industrial Production (IIP), which is largely driven by expenditure incurred in BPCL & BGRL’s CGD projects economic activity. MAK drove the industrial business during the year 2019-20 is approx. ` 351 Crores. through the acquisition of new customers, introduction During the year, BPCL commissioned its first CGD of new products, and value-added services to the direct network in Rupnagar GA which includes commissioning customers, despite a tough external environment. The of City Gas Station (CGS), District Regulating Station Company strengthened its OEM portfolio by entering (DRS), Piped Natural Gas (PNG) network and 4 CNG into a new agreement with KIA Motors and renewed the
Annual Report 2019-20 67 agreement with TATA Motors for marketing its Genuine LPG Plants in BPCL continue to maintain their record Oil and grew significantly in the personal and commercial of following the best practices in HSSE, coupled with mobility space. improvement in productivity and cost leadership. During MAK continued to deliver its strong performance in the year 2019-20, BPCL’s bottling capacity was 6.2 SAARC countries by proliferating its presence in the MMT, recording growth of 7.2% and achieving capacity secondary market through the channel partners. Under utilization of more than 100% in 52 Bottling Plants network expansion into other countries, MAK expanded across the country. To meet the increasing demand its footprint in a few Gulf Cooperation Council (GCC) of LPG, several steps were taken to enhance bottling countries. capacities, tankages and import receipt terminals. BPCL commissioned a new Bottling Plant at Baitalpur (UP) There was an unprecedented impact on the Lubricant through the O&M (Operations and Maintenance) Model demand in March 2020 due to the COVID19 pandemic, to reduce operating cost. Mechanical commissioning of which has created uncertainty in demand during the the LPG Import Terminal at Haldia and Bottling Plants at year 2020-21. However, expansion opportunities such Bolangir (Odisha) and Madurai (Tamil Nadu) have already as automobile manufacturing, automotive components, construction activities and the power sector will drive been completed. Construction work for a new Bottling growth. MAK will ensure its significant presence and Plant at Bokaro (Jharkhand) is in an advanced stage. penetration in personal and commercial mobility. BPCL The Plant Automation project was completed at 4 plants- is also working with many industrial and OEM customers Pune, Sholapur, Bakania and Jalgaon. In addition to the to build enduring partnerships and augment product Bulk LPG Tankers, a Vehicle Tracking System (VTS) development with new technology. MAK will continue has been installed in the fleet of Packed LPG Trucks for to invest in training and development to enhance the monitoring purpose as well as for effective planning in the capability of channel partners and their staff to compete Plants. Imparting training to Bulk LPG Tanker drivers, to and excel in the market place. create a pool of trained drivers, continues to be one of the LPG focus areas under the Safety initiative. At the Centre of The LPG Strategic Business Unit (SBU) registered sale Excellence, 11 workshops covering 217 participants with of 6.87 MMT with a growth of 5.8% and growth of 578 man days, were conducted during the year. 0.02% in market share in the LPG Domestic segment in BPCL commissioned a 169 km long cross country LPG the year 2019-20. LPG has an overall market share of pipeline from Uran to Chakan & Shikrapur, of 1 MMTPA 26.28% amongst major OMCs. Network expansion has capacity, in partnership with HPCL. A Joint Venture of been a priority for providing accessibility of LPG to all IOCL, HPCL and BPCL was formed for the longest LPG households in the country, especially in rural areas. The pipeline of 2757 kms from Kandla to Gorakhpur with an LPG SBU added 214 Distributors during the year, thereby investment of about ` 10,000 Crores. taking the total distributor network to 6,110. Newly added Distributors have been commissioned mainly in the rural A major drive was undertaken to enroll new Point Of Sales areas to extend benefit to Ujjwala customers and facilitate for marketing 5 Kg Free Trade LPG (FTL) cylinders, wherein service to overall 8.25 crore households. 17,500 new customers were enrolled to increase reach to the targeted customer segment of IT professionals, BPO To support the expanding customer base, second cylinder employees, students, roadside eateries, etc., who are facility was extended to 17.8 lakh customers leading outside the established LPG connection refill system. the ‘Double Bottle Connection’ coverage to 3.23 crore customers, which is 39.1% of the total consumer base. In synergy with team Corporate Research and Development Pradhan Mantri Ujjwala Yojana (PMUY) envisaged Center (CRDC), the LPG SBU successfully launched the providing LPG connections to women belonging to poor in-house developed cost effective “NxtGen Bharat Metal households with a target of 8 crores by March 2020. This Cutting Gas (BMCG)”- an Industrial gas fortified with an target of 8 crore LPG connections was achieved by the innovative Nano-additive, which has a long shelf life of OMCs during the first week of September 2019, 7 months 8 months vis-à-vis the earlier one month. The product ahead of schedule. The Company had released 23.67 offers excellent performance, a smoother finish with Lakh connections during the year 2019-20 and overall minimal slag, better stability and also saving towards fuel 2.105 crore connections since inception of the PMUY. and time. This revised version of the product offers a new With the launch of the PMUY in 2016, LPG coverage has business edge to the Company in the competitive Metal increased from 62% to 97.5% as on end March 2020. Cutting Business.
68 Bharat Petroleum Corporation Limited BPCL has proactively joined the Digital India program catalyst for innovation and excellence in execution. and embarked upon several customer-centric initiatives The set-up has been continuously working along with such as bookings through WhatsApp for domestic various SBUs to analyze long term trends and suggest consumers, pay and book facility on Amazon, payment requisite interventions to overcome imminent business solution through Phone Pay, Bharat Bill Payments System challenges, use digital innovations to stay connected with (BBPS), SBI YONO, FINO & Google Pay and geo-tagging all customers and ultimately deliver performance on a of refill deliveries. sustained basis. AVIATION BPCL’s Startup initiative, christened as “Project Ankur” The Aviation SBU achieved its highest ever sales of was started in 2017, in line with Government of India’s “Startup India” initiative, recognizing the importance of 2005 TMT with 0.8% growth against industry de-growth Startups as an innovation engine. The aim of Project of (1.3%) by retaining large volume customers in the Ankur is to develop a supportive ecosystem that nurtures domestic and international segments. The negative growth entrepreneurship in the country by backing innovative of the industry was due to the collapse of Jet Airways in ideas/concepts that have the potential to grow into April 2019, which had 15% market share and the onset of promising Startups and create a multiplier effect on the COVID-19 pandemic, followed by a lockdown in the the entire ecosystem. BPCL has initially allocated ` 25 later part of March 2020. Crores for this purpose and this fund is being distributed The Aviation SBU incurred ` 30.8 Crores on capital assets, as grants to deserving applicants. Till 31.03.2020, 25 mainly on account of purchase of refuellers, additional Startups were funded, amounting to a total of about tankage and revamping of the fire-fighting facility at ` 24.9 Crores, of which about ` 19.60 Crores has already Cochin, and procurement of self-bunded tanks. The SBU been disbursed. BPCL is also providing mentoring and commissioned new Aviation Fueling Stations (AFSs) at guidance to these Startups. Additionally, BPCL’s Startup Madurai and the IAF station at Panagarh, RCS airports cell has been facilitating Startups to engage with SBUs at Kalaburagi and Pakyong, self-bunded tanks for the through separate contractual arrangements to implement Army at advanced landing grounds at Misamari and Rupa new initiatives and test services provided by them. two tanks at Budge Budge installation, additional tanks To collaborate on Startups and have a steady pipeline of at Tirupati AFS and Raipur AFS, and ATF Testing Facility applicants, BPCL has signed MoUs with Kerala Startup at Devanagonthi Installation. In-principle permission Mission (KSUM), Invest India, New Delhi, IIT Madras, was obtained from Centre for Military Airworthiness and KIIT, Bhubaneswar, Axilor Ventures, Bangalore and IIM Certification (CEMILAC) to start ATF Pipeline Transfer Kozhikode, Kerala. (PLT) in the multi-product pipeline from Bina to Piyala and Piyala to Bijwasan with pipeline compatible kerosene During the year, an additional corpus of ` 25 Crores for the plug as interface. second phase of Project Ankur was approved for a 3 year period. With a view to attract the best entrepreneurial talent The Aviation SBU accords highest priority to safety and channelize creative and innovative energies towards and the environment, hence strictly adheres to Quality solving industrial problems, BPCL had launched a grand Assurance and Standard Operating Procedures. There challenge for Startups, wherein 6 problem statements was no incident of fire and nil lost time accidents (LTA). were provided and a grant of ` 50 lakhs would be given There were no major deviations in Quality, Operations and to the winner of each one. Further, winners would also Safety audits this year. get an opportunity to carry out the Proof of Concept of the A Junior Business Council has been formulated to same with BPCL. leverage new ideas and the boundless energy of young Going forward, BPCL is committed to support startups officers. Familiarization programs were organized for IAF in a variety of ways, including grant funding, equity personnel. Refresher courses were organized for BPCL investment, business exposure, mentoring and guidance. and ‘into-plane’ refueling staff. All locations are now covered for centralised invoicing of sales at AFSs. Globally, Electric Vehicles are being looked at as the solution to the challenges faced due to increasing CORPORATE STRATEGY AND BUSINESS DEVELOPMENT pollution levels across the world. In order to capitalize on (CS&BD) the opportunity and enjoy first mover advantage in India, The key focus of CS&BD is to explore new strategic BPCL has been working on various business options opportunities across the value chain to enhance in the EV value chain. During the year, BPCL launched efficiencies, find new business models and act as a the “E-Drive” initiative - an innovative electric vehicle
Annual Report 2019-20 69 mobility model based on battery swapping. BPCL worked As a part of this initiative, unique roles are identified closely with IIT Madras and other stakeholders, including across the organization and these roles are mapped battery and automobile manufacturers for using BPCL’s with competencies required to succeed in these roles. A Retail Outlets as swapping stations. This initiative was Competency Dictionary is defined for 307 roles spanning launched on a pilot basis in February 2020 for 3 Wheelers across the organization. in Lucknow and Kochi. BPCL is in the process of upgrading to Maturing Level 3 Further, Corporate Strategy is partnering with Marketing of the People Capability Maturity Model (PCMM) which is SBUs for digital transformation in the Corporation. With a proven set of people management practices that provide the objective of making BPCL’s customer interfacing a roadmap for continuously improving the capability of an units technology relevant at all times and to get a single organization’s workforce. view of the customer across the organization, “Project The cornerstones of BPCL’s capability/skill building for Anubhav” has been initiated. This will be further extended the organization were Instructor-led Training, Digital to cross-sell and up-sell BPCL’s goods and services Learning, Alternate Learning & Purposeful Engagement. to customers. A few initiatives under Project Anubhav The core focus of the learning strategy remained include a Customer Engagement Platform, Command leadership building and critical skills through the Control Center, Digital Marketing Platform and Integrated Behavioural Learning Framework and other customized Supply Chain Management solutions. Further, the Retail training programs with the objective of grooming leaders SBU and Corporate Strategy are working towards digitally and subject matter experts for the organization. This was enabled solutions, using the design thinking principles complemented by 62 officers pursuing their Executive to improve Retail Outlet performance through enhanced Management Course at SP Jain Institute of Management customer experience at ROs. Research, 3 officers pursuing an Executive M Tech course BPCL has initiated action to set up an Integrated at Institute of Chemical Technology, Bhubaneshwar Messaging platform to connect all BPCL communication and 496 officers were extended learning opportunities to any messaging channel, unifying all customer through Management Development Programmes at interactions into a consistent omni-channel conversation. Premier Institutes. The total training mandays for the year A pilot for LPG booking through WhatsApp has been 2019-20 covering internal and external training was carried out. 31,761 mandays. A state-of-the-art Corporate Digital Center is being set Digital Learning was leveraged to provide opportunity for up at the head office to comprehensively build a common employees to learn anytime or anywhere through EBSCO data warehouse across the organization, essentially to resources and the Linked-In Learning Library. BPCL’s enable integrated and more effective decision making ability to curate relevant content to ensure personalized by top management. It will encompass data visualization learning led to high adoption rates. The Learning and data analytics to arrive at Predictive Analytics and Management System in place ensured better user enriching analytics with Artificial Intelligence and Machine experience and enabled us to make data driven decisions Learning to evolve into Prescriptive Solutions. on learning. The Corporate Strategy department, along with BPCL continued its efforts of capturing tacit knowledge of Businesses, has from time to time been carrying employees by encouraging them to create Learning videos out various initiatives for cost rationalization and and hosting them on the VIZDOME platform, making it a improvement in process efficiency in BPCL. Also, being rich repository of knowledge. Other alternate learning constantly on the lookout for new business opportunities, platforms like SOCRATIX, the case study competition BPCL is charting out the growth trajectory and developing and MERCURIX, the story telling competition provided business cases for future investment by working on key experiential learning to participants, apart from being an areas of potential future growth such as Petrochemicals, excellent platform for identifying talent. Alternate Energy, Renewable Energy, Global forays, etc. Ensuring that the workplace allows both profession and HUMAN RESOURCES (HR) passion to blend was achieved through “iPassion”, a BPCL constantly strives to enhance HR Practices and platform for pursuing hobbies and interests. Apart from processes. In line with this philosophy, the company has nurturing their passion through workshops, employees embarked on the journey of creating a comprehensive were provided an opportunity to showcase their talent at Functional Competency Framework for the organization. iPassion Night.
70 Bharat Petroleum Corporation Limited Empowering women employees and harnessing their Employee wellness potential to achieve greater success on both personal Interdependence of emotional well-being and physical and professional front was initiated through 20 different well-being was highlighted through various platforms. initiatives covering 494 women employees across the Aiming to motivate employees positively, ESE regularly Corporation like leadership, financial wellness, physical publishes articles on topics like parenting, councelling, wellness, work-life balance, self-defence etc. resilence, choices, support systems, suicide prevention, Junior Business Council (JBC): The JBC was started self-confidence, mental and emotional health, etc. in April 2019 to groom young leaders (JG C to JG E) An “Inter-Connect” e-Zine focusing on wellness was of tomorrow by giving them exposure to real integrated introduced this year and has been well received. business challenges, providing a platform at the highest Employee connect levels of decision-making as well as to channelize their enthusiasm, agility, entrepreneurial spirit and nurture ESE connects with employees in many ways. 25 holistic thinking capability. workshops, seminars and sessions with external faculty were organized covering over 1900 employees across EMPLOYEE SATISFACTION ENHANCEMENT (ESE) the country. Workshops and seminars on “mindfulness”, ESE is a unique and innovative initiative taken by the “professional Image”, “resilience”, “legal will planning”, organization to make BPCL ‘A Great Place to Work’ “budget and tax planning, a happy retired life” and “life by being a facilitator towards keeping the employees style diseases” were organised. Employee engagement healthy, vibrant and energized. The ESE team continued activities included exhibitions on handicrafts, handmade its endeavours by working towards 360 degree wellness umbrellas, Onam Mela and organic women’s fabrics. Quiz of employees, living up to BPCL’s core purpose of contests on Mother’s Day and World Diabetes Day were energizing lives. ESE followed a plan of enhancing organized. World Environment day was celebrated at KR employee satisfaction through employee wellness, with the objective of creating awareness in employees employee connect and prompt grievance redressal. about environment needs like water conservation, Proactive grievance identification & resolution planting trees, recycling of kitchen waste/E-waste and conservation of natural resources. Employees are wished BPCL, recognizes that unless adequately and promptly on their special occasions such as birthday, promotion resolved, health and wellness issues may result in lower and retirement, engendering feelings of being cared for. productivity and demoralized work force, something that no organization can afford. The ESE team carries the INTEGRATED INFORMATION SYSTEMS (IIS) mandate to reach out to maximum number of employees Team IIS has been continuously creating value for the in a proactive manner, to listen to them, to understand businesses by enabling new business processes and their concerns and resolve those. During the year, ESE enhancing existing processes. teams conducted 88 awareness sessions across 80 Digital Initiatives: Digitally signed product invoices locations and proactively interacted with over 1300 were enabled for the Aviation and Gas Businesses and employees as sharing and learning exercise. about 88,500 invoices were mailed to customers. During Employee Assistance Program (EAP) the year digitally signed purchase orders for Supply of It is with the objective of having a healthy, energized Goods and Services was introduced and 7000 purchase and productive workforce, that ESE introduced free and orders have been mailed to vendors since February 2020. confidential psychological counselling services for all A Retail Auto Invoicing System (RAIS) was implemented employees (and their dependents) through an EAP vendor at 72 locations resulting in increased efficiency of the under the initiative – Roshni Plus. product despatch process and increased transparency Registration opens up a new window for wellness for among the supply location, dealer and transporter. them and their families, access to a self- help library, self- The Retail business is seeing this as an opportunity to assessment tests and free and confidential counselling rationalize the numbers of officers deployed for planning sessions. Employee Assistance Program (EAP) product despatches. registrations have crossed 6000 and during the year, 195 ERP and the GeM portal have been interfaced to facilitate counselling sessions, 289 self-assessment tests and 47 sharing of the purchase order, invoice and payment Health Risk Assessments were conducted . In addition, information and 250 purchase orders have been shared 1343 topical articles were shared under EAP. so far.
Annual Report 2019-20 71 BPCL enabled rural customers to digitally book LPG locations. BPCL recently organized a “One Energy- One Cylinder refills, at 2.5 lakhs Customer Service Centres Force, One Vision” forum for integration, standardization (CSCs), a Government of India facility to deliver e-Services and replication of HSSE initiatives in Marketing and to rural and remote locations. Refinery units. HEALTH, SAFETY, SECURITY & ENVIRONMENT (HSSE) All the locations of BPCL strictly adhere to SOPs BPCL practices the ‘Safety First, Safety Must’ mantra and guidelines to ensure safety of operations. Asset across the organization and believes in imbibing the Integrity plays an important role in determining the principles of Sustainable Development with the highest safety, operational performance and profitability of the concern and commitment for Health, Safety and Security organization, hence, to ensure integrity of the assets, of employees, contractors and all other stakeholders and they are continuously examined, monitored, inspected, communities. Safe operations and implementation of periodically maintained and replaced. health, safety and environmental initiatives remain at the A portal has been developed for capturing incident core of all business activities for BPCL. reporting, which is a very critical activity to disseminate BPCL’s commitment towards safety is evident, as KR has the learnings and take necessary corrective actions. . The achieved 64.42 million man-hours for employees without internal and external incidents reported in the system are Lost Time Accidents as on 31.3.2020 whereas MR stands investigated, analyzed and thoroughly reviewed. Use of an at 2.25 million man-hours. The Behaviour Based Safety industrial drone was carried out in MR for monitoring of (BBS) program, which helps in changing the existing ongoing jobs to improve safety and productivity. Robotic unsafe workplace behaviours by identifying and using cleaning of manholes of underground pits was carried out the right behaviour has been successfully implemented at without manual intervention. BPCL always looks forward Refineries. This has given results and helped in decreasing implementation of technological innovations which the number of unsafe conditions substantially. KR is in improve safety across the businesses. an advanced stage of implementation of Process Safety Global warming and climate change are the biggest Management (PSM) principles and MR has also initiated environmental issues that the world is facing today. BPCL the same. believes that innovations and technological advances can It has always been the constant endeavour of BPCL to improve performance and energy efficiency of operations. achieve its mission of Zero Incidents, Zero Harm and Towards this objective, BPCL has implemented various Zero Excuses. To ensure emergency preparedness, mock initiatives. A Flare Gas Recovery System (FGRS) drills are regularly conducted at all locations to keep for emission reduction and energy conservation is everyone in the state of readiness. A comprehensive operational in the Refineries. MR has implemented many report is prepared using root cause analysis, learnings energy conservation schemes having potential savings and recommendations to prevent any recurrence of of 19,882 MTOEs/Year & reduction of CO2 emission incidents. In addition, technological advancements have by 62,742 MT/Year, whereas KR energy conservation helped in reduction of in-transit transport accidents as schemes have potential savings of 16,927 MTOEs/Year well as those at consumer premises. & reduction of CO2 emission by 53,466 MT/Year. Internal and External Audits are considered to be an BPCL is capturing data on parameters like energy, integral part of operations and their compliance is given water, and waste, etc. from the Refineries and Marketing very high importance. This year, there is a reduction in locations across India and implementing various initiatives old pending External Safety Audit recommendations by to minimize the operational impacts on the environment. 95%. Root Cause Analysis of incidents is undertaken to BPCL trusts that transitioning to clean energy alternatives increase collaborative learning for safer operations and will help protect our environment hence, it has been greater adoption of best practices. Governance practices increasing its renewable energy capacity. The capacity of the safety systems & Standard Operating Procedures has increased to 43.43 MW in the year 2019-20 as (SOPs) of the critical processes are regularly monitored compared to 31.70 MW during the year 2018-19. Energy to ensure safe working across all locations. BPCL efficient lighting capacity has been increased to 17.95 regularly conducts HSSE workshops, and other initiatives MW in the year 2019-20 as compared to12.66 MW like “Safety Voice”, “Safety Moment”, “Safety Share”, during the year 2018-19. MR became the first Refinery in “Virtual HSSE Town Hall Meeting” etc. where information India to convert 100% of its conventional lights into LED on best practices is disseminated which helps to ensure lights. This initiative resulted in power saving of 9,840 collaborative learning for safer operations across all MWH/annum corresponding to a benefit of ` 9.6 Crores/
72 Bharat Petroleum Corporation Limited annum & reduction in CO2 emission by 7,085 MT/annum. Sustainable Development Reports of Bharat Petroleum These initiatives on renewables have resulted in an annual are assured by an independent third-party assurance reduction of approx. 104376 MT of CO2 equivalent. provider as per Accounting Ability (AA) 1000 Assurance Besides, the other sustainable initiatives of Ujjwala Yojna/ Standard (AS) 2008 and International Standards of transportation of product through pipelines and use of Assurance Engagement (ISAE) 3000. BPCL’s efforts on Biofuel in MS and HSD helped in reduction of emissions Sustainability were recognized by various institutions and by 1686,400 MTCO2e. In the year 2019-20, BPCL has agencies through Awards and Accolades this year. taken a target of planting one million trees by end 2022 to BPCL has taken various steps to continue its essential improve biodiversity. Approx. 72,000 trees were planted services during the time of the COVID-19 pandemic. this year taking the total number to more than 3.2 lakhs BPCL has published a comprehensive COVID manual in the year 2019-20. BPCL has also increased its carbon with details on procedures to be followed at operating sink by sequestration of CO2 with trees of more than locations and offices, use of Personal Protective 7,800 MT CO2 this year. Equipments (PPEs) and disinfectants and recommending BPCL is fully aware of the importance of water and has ways to manage stress levels during this time for all its been working towards increasing the rainwater harvesting employees and stakeholders. capacity to reduce the dependency on other sources BPCL endeavors to improve its performance on Health, of water. The total catchment area under rainwater Safety, Security and Environment continuously and 2 harvesting has been increased to 823732 m in the year minimising its operational impact on its stakeholders. 2019-20, as compared to 7,78,939 m2 in previous year. BPCL has recently carried out a Water Conservation Study Bio-fuels in both the Refineries. Efficient consumption of fresh The Government of India has prepared a road map to water and waste water generated is regularly monitored. reduce import dependency in the oil & gas sector by Effluent treatment plants are installed at both Refineries implementing a five pronged strategy which includes and the treated water is used for non-potable uses. BPCL adopting biofuels as one of them. With the aim of has set up a Sewage Treatment Plant in collaboration increasing the ethanol blending percentage in petrol to with Rashtriya Chemicals & Fertilizers for treating 22.75 20% and in diesel to 5% by 2030, ethanol was procured Million Litres /Day (MLD) of Municipal Sewage to produce from additional feed stocks like 100% sugar cane juice, 15 MLD of treated water to reduce the environmental B heavy molasses and damaged food grains resulting impact, which helped in reduction of dependency of raw in blending percentage of petrol by 4.22%. The storage water from Brihanmumbai Municipal Corporation (BMC) cover has also been increased from 11 days to 15 days by 35% i.e. approx. 6 MLD. at marketing locations. BPCL is following the rule of reduce, reuse and recycle of To meet the blending targets, BPCL is setting up a 2G waste in all its operations. Use of single use plastic has Bio ethanol Refinery in Bargarh district of Odisha. The been prohibited across Businesses. The BPCL has also proposed refinery has been designed for a production adopted composting in a big way to dispose of organic capacity of 100 Kilo Litres per Day (KLPD) of 2G ethanol waste in a responsible manner from the Refineries and using approximately 400 MT/day of biomass as the other Marketing locations. Approx. 350 tons of organic feedstock (rice straw/ maize stalk). The 2G ethanol waste has been converted into compost and used for produced shall be used for blending in petrol. As on gardening purposes in year 2019-20. BPCL disposes date, engineering works for proprietary equipment are in off Hazardous waste also as a responsible company and an advanced stage and manufacturing of equipment at “Zero Waste to Land Fill Certification” was carried out the Licensor’s workshop and construction of temporary for one Retail and One Lubricant location on a pilot basis facilities at site are in progress. The overall physical successfully. progress of the project as on March 2020 is 20.1%. The BPCL has institutionalized sustainability as a core project is expected to be completed in 2022. parameter in its philosophy. The focus is on safe BPCL has also taken initiatives in the field of production operations and energy efficiency, improved processes of Compressed Bio-Gas (CBG) from biomass waste/ and technologies, reduced resource consumption, biomass sources like agricultural residue, sugarcane minimising the impact of operations on the environment press mud, municipal solid waste, etc. The company and creating a healthy, safe and secure workplace. The has invited Expressions of Interest (EOIs) from potential latest report on Sustainability was published following entrepreneurs to set-up CBG plants. In response to the the GRI Standards framework in the year 2018-19. The EOIs, applications for setting-up 94 plants have been
Annual Report 2019-20 73 received. A total of 79 Letters of Intent (LOIs) have been its presence in the bunker market and BPCL became the issued for a production capacity of 337 Tonnes per Day first oil marketing company in India to export Very Low (TPD) (111 TMTPA). Sulphur Fuel Oil (VLSFO 0.5% Sulphur max.) International BPCL has also taken initiatives for production of Bio Maritime Organization (IMO) compliant fuel grade post diesel from used cooking oil for which offers have been implementation of new IMO fuel specifications that came st received for setting up of 8 plants, with a combined bio- into effect from 1 January, 2020. diesel production capacity of 196 TPD. The offers are The freight chartering market witnessed extreme volatility under evaluation and post evaluation LOIs will be issued. throughout 2019-20. Heightened unrest in the Arab INTERNATIONAL TRADE & RISK MANAGEMENT (ITRM) Gulf region in June and September 2019, US sanctions on Chinese Shipping company, implementation of IMO The ITRM set-up is primarily responsible for all import and 2020 rules to reduce Sulphur emissions and subsequent export related activities of BPCL, including procurement of increase in cost of bunker fuels, and increase in World crude oil both indigenous as well as imported, import of Scale rates, all contributed to sharp rise in freight costs. petroleum products to bridge the gap between domestic However, judicious mix of vessel types, optimization of demand and availability and export of petroleum products cargo size and meticulous planning has ensured lesser which are surplus after meeting domestic demand. The impact in freight chartering. associated services of freight chartering and shipping operations are also facilitated by ITRM. In addition to the BPCL is exposed to price risk arising from adverse above physical activities, ITRM actively participates in the movement in prices of crude oils procured from both paper (financial derivatives) market for the purpose of international as well as domestic sources, petroleum Risk Management by covering refineries operating cost products sold in the domestic market as well as exported, and other associated costs. and freight charges of ships in-chartered for transportation of imported cargoes, as all these prices are benchmarked ITRM steered BPCL towards a journey on setting up its against international prices. BPCL has a comprehensive independent Crude Oil Trading Desk, in partnership with Commodity Risk Management Policy wherein all such M/s Shell, after revision in crude oil import policy by price risks have been identified and the process for the Government of India in mid-2016. BPCL is the first monitoring, measuring, mitigating and reporting have and only Oil PSU to embark on such a journey, with the objective of aligning to the best global practices adopted been laid down. by major Oil Companies across the world and continually During the year 2019-20, ITRM hedged BPCL’s exposure enhancing value in the arena of crude oil sourcing/ to the above commodity price risks in the international trading. During the last 2 years, BPCL has also achieved Over-The-Counter (OTC) market in accordance with the feat of sourcing crude oil from all six continents BPCL’s Commodity Risk Management Policy. (Asia, Africa, Australia, Europe, North America & South ITRM continues to focus on optimization of landed crude America), through the Trading Desk approach. Also, cost, maximization of product export value, enrichment of with continual exposure to the best global practices of the commodities hedging portfolio and management of M/s Shell through targeted learning programs, the ITRM inherent risks. Going forward, given the unprecedented Trading team of BPCL has continually up-skilled itself to economic conditions due to the pandemic situation, and take over independent Trading Desk operations in future. the consequent impact on oil prices, the role of ITRM During 2019-20, ITRM further diversified its crude oil shall assume greater significance. sources and ensured enhanced value by importing several RESEARCH AND DEVELOPMENT (R&D) new grades of crude oil across geographies, based on processing requirements and prevailing economics. During 2019-20, the R&D Centers of BPCL continued the For the first time, crude oil grades such as Lula and trend of developing energy efficient technologies, novel Iracema were imported from Brazil and CPC Blend crude products, cleaner fuels and providing valuable technical oil cargo was imported from Kazakhstan, considering support to SBUs. arbitrage opportunities, global supply-demand and overall The R&D team developed a refrigeration based Vapour economics. Recovery System (VRS) to recover hydrocarbon vapour Conscious efforts were made to diversify sourcing of LPG and successfully commissioned the pilot at BPCL’s from the Middle East region in 2019-20 with the import COCO Retail Outlet, Greater Noida. Preliminary results of LPG from US and Norway for the first time. Tapping showed more than 80% of hydrocarbon vapour emissions the market opportunity in the year 2019-20, ITRM marked reduction during unloading of the tank-lorry.
74 Bharat Petroleum Corporation Limited In collaboration with Centre of High Technology (CHT) EXPLORATION AND PRODUCTION OF CRUDE OIL and Engineers India Limited (EIL), a new desalter AND GAS OPERATIONS OF THE COMPANY THROUGH internal design was developed and successful trials were WHOLLY OWNED SUBSIDIARY conducted in Kochi Refinery. The novel design was found to be superior to the existing desalter internal design and Operations of the Company scaling-up of innovation is being premeditated. Bharat PetroResources Limited (BPRL) has participating An in-house developed rapid tool (K-Model) for crude interest (PI) in twenty seven blocks of which fifteen are oil blend compatibility prediction has been successfully located in India and twelve overseas, along with equity implemented in refinery operations. The tool enables stake in two Russian entities holding the license to arriving at an optimum compatible crude oil blend and four producing blocks in Russia. Seven of the fifteen processing feasibility on real time basis. In this context, blocks in India were acquired under different rounds of K-Model helped the refineries in taking timely decisions New Exploration Licensing Policy (NELP), five blocks of selecting opportunity crudes for co-processing with were awarded under Discovered Small Fields (DSF) Bid regular crude oils, resulting in substantial value addition. Round I and three blocks were awarded under the Open Likewise, the tool viz. BPMARRK® for rapid crude assay Acreage Licensing Policy (OALP) Bid Round I. Out of has been implemented in refinery operations for Real- time Monitoring & Optimization of Crude Distillation Units. twelve overseas blocks, five are in Brazil, two in United Arab Emirates and one each in Mozambique, Indonesia, R&D also developed a Gasoline Sulphur Reduction Australia, Israel and Timor Leste. The blocks of BPRL additive GSR-CAT, which is continuously being used are in various stages of exploration, appraisal, pre- in the refineries. The average sulphur reduction of 32% development and production. The total acreage held by in gasoline sulphur has been achieved with 10% GSR BPRL and its subsidiaries is around 32304 km2 of which catalyst additive, leading to savings in costs. approximately 57% is offshore. Commercial production of Water Detecting Paste (WDP) for determination of water in Ethanol Blended MS (EBMS) The PI in respect of Blocks in India, Israel and Australia and Quick Test Method (QTM) kit for determination of are held directly by BPRL. BPRL has wholly owned ethanol in EBMS has been initiated and implemented in subsidiary companies located in the Netherlands, Retail operations on a pan India basis. Singapore and India. The PI in the Block-JPDA 06-103, in R&D’s corrosion inhibitor formulation for preventing Timor Leste is held by BPRL’s wholly owned subsidiary crude oil pipeline internal corrosion has been scaled- company in India, i.e. Bharat PetroResources JPDA up for performance demonstration in the Vadinar-Bina Limited. The subsidiary located in the Netherlands, i.e. Pipeline (VBPL). This will be the first instance of using BPRL International BV, in turn has four wholly owned corrosion inhibitors in the BPCL crude oil pipeline. subsidiary companies viz. BPRL Ventures BV, BPRL R&D came up with an improved version of Bharat Ventures Mozambique BV, BPRL Ventures Indonesia BV Metal Cutting Gas (BMCG) viz. NxtGen BMCG, which and BPRL International Ventures BV. BPRL Ventures BV is commercialized. The NxtGen BMCG formulation has 50% stake in IBV Brasil Petroleo Limitada, which offers a smooth cutting finish with minimal slag. Bharat currently holds PI ranging from 20% to 40% in five blocks FurnoChem, a furnace cleaning chemical was developed in off shore Brazil. BPRL Ventures Mozambique BV has and its performance was demonstrated in MR. The PI of 10% in a block in Mozambique, and BPRL Ventures use of Bharat FurnoChem helped in maximizing crude Indonesia BV holds PI of 12.5% in a block in Indonesia. throughput. BPRL, through BPRL International Ventures BV, has Other products such as synthetic petrol engine oil for 30% stake in Falcon Oil and Gas BV, which holds 10% latest generation passenger cars, advanced engine oil stake in the Lower Zakum concession in offshore Abu for modern 4-stroke motorcycles, high performance Dhabi, UAE. Further, BPRL’s wholly owned subsidiary gas engine oil for new generation auto rickshaws were in Singapore, i.e. BPRL International Singapore Pte Ltd developed for generating new business. Development of (BISPL) holds 33% each in two Special Purpose Vehicles transmission fluid for EVs, food grade lubricants, high (SPV) i.e. Taas India Pte Ltd (TIPL) and Vankor India Pte viscosity warp sizing oil for the textile sector are other Ltd (VIPL) which hold 29.9% and 23.9% in the Russian outcomes of research activities carried out. entities LLC TYNGD and JSC Vankorneft respectively. During the year, the continuous in-house R&D efforts BISPL further holds 50% stake in Urja Bharat Pte Limited have resulted in grant of 15 patents and filing of 10 patent (UBPL) in Singapore which is the Operator of Onshore applications. Block 1 Concession in Abu Dhabi with 100% PI.
Annual Report 2019-20 75 RUSSIA BPRL, jointly with IOCL, was awarded the Onshore Block 1 Concession as an operator with 100% PI in March BPRL along with Oil India Limited (OIL) and Indian Oil 2019 under Abu Dhabi 2018 Block Bid Round. The block Corporation Limited (IOCL), jointly referred to as the Indian is held by Urja Bharat Pte Limited (UBPL), a 50:50 Joint Consortium (IC), holds 23.9% stake in JSC Vankorneft Venture company of wholly owned subsidiaries (WOS) of and 29.9% stake in LLC Taas Yuryakh Neftegazodobycha BPRL and IOCL incorporated in Singapore. Onshore Block (“TYNGD”). In JSC Vankorneft, Rosneft holds 50.1% 1 covers an area of 6,162 km2 located in the Al Dhafra shares, ONGC Videsh Ltd. (OVL) (through its subsidiary) region around Ruwais City and the refining complex, holds 26% shares and IC (through subsidiary companies) including the coastal region to the west. There are two holds the remaining 23.9%. existing undeveloped oil and gas fields in the area, named Ruwais and Mirfa, which will be appraised by the In TYNGD, Rosneft (through subsidiary) holds 50.1% consortium, in addition to available prospects/leads for shares, BP (through a subsidiary) holds 20% shares and exploration. IC (through subsidiary companies) holds the remaining 29.9% shares. MOZAMBIQUE BPRL, through its Netherlands based step-down During the year 2019-20, JSC Vankorneft produced subsidiary company, i.e., BPRL Ventures Mozambique approx. 13.43 MMT of Oil and 5.8 BCM of Gas (BPRL’s B.V, holds 10% PI in the Rovuma Offshore Area 1 effective share being 1.06 MMT Oil and 0.46 BCM Gas). concession in Mozambique. Total E&P Mozambique During the year 2019-20, IC received dividend amounting Area 1 Limitada, a wholly owned step-down subsidiary to approx. USD 364 Million (with BPRL’s effective share of Total S.A. is the Operator with 26.5% PI and the other of approx. USD 120 Million). consortium partners are Mitsui E&P Mozambique Area 1 During the year 2019-20, TYNGD produced approx. 4.20 Limited (20%), ENH Rovuma Área Um, S.A. (15%), ONGC MMT of Oil and 1.45 BCM of Gas (BPRL’s effective share Videsh Rovuma Limited (10%), Beas Rovuma Energy being 0.41 MMT Oil and 0.14 BCM Gas). During the year Mozambique Limited (10%) and PTTEP Mozambique Area 1 Limited (8.5%). 2019-20, IC received dividend amounting to approx. USD 241 Million (with BPRL’s effective share of approx. USD Following the announcement of Final Investment Decision th 80 Million). (FID) on 18 June, 2019 by Area 1 Consortium partners to develop a 2-Train (2 x~6.44 MMTPA) onshore initial UNITED ARAB EMIRATES (UAE) LNG Project utilizing the gas from offshore Golfinho-Atum BPRL, in consortium with OVL and IOCL acquired 10% reservoirs, the Golfinho-Atum Field Development Plan stake in the offshore producing oil asset, Lower Zakum has become effective and Development and Production Period of 30 years has commenced. Concession in Abu Dhabi, UAE. The IC’s share in the Lower Zakum Concession is held through Falcon Oil & All major construction contracts such as onshore Gas B.V, a SPV incorporated in the Netherlands, where Engineering, Procurement &Construction (EPC) and BPRL holds 30% shares through its step down subsidiary offshore Engineering, Procurement, Construction BPRL International Ventures B.V in the Netherlands. The & Installation (EPCI) (CPI) have been executed and Concession has a term of 40 years effective from March engineering, procurement and construction activities 2018. The international shareholders in the Lower Zakum have commenced. concession are JODCO (10%, a wholly owned subsidiary Area 1 partnership on 15th July, 2020, has finalized senior of Japan’s INPEX Corporation), China National Petroleum debt financing of US$ 14.9 Billion to advance the 2-Train Corporation (10%), Italy’s ENI (5%) and France’s Total LNG project. The senior debt comprises of a mix of S.A. (5%). The Abu Dhabi National Oil Company (ADNOC) Export Credit Agencies (ECA) Direct Loans, ECA Covered holds a majority 60% stake in the concession. The Lower Facilities, Commercial Bank facilities, and a loan facility Zakum field, located in Abu Dhabi Offshore shallow water, with one multilateral development institution. has been producing crude oil since 1967. The Indian BRAZIL Consortium’s entitled crude oil from the concession has IBV Brasil Petroleo Limitada (incorporated in Brazil) a joint been approx. 15.23 million barrels during the year 2019- venture company of BPRL Ventures BV, and Videocon 20. During the year 2019-20, BPCL Group Refineries Energy Brazil Ltd, step down subsidiaries of BPRL & have lifted approx. 5.1 million barrels of Das Blend Crude Videocon Industries Limited respectively, holds PI in 5 Oil as its equity oil from the Lower Zakum Concession. blocks in 3 concessions in Brazil.
76 Bharat Petroleum Corporation Limited In Sergipe Alagoas (BM-SEAL-11) concession, which ISRAEL currently consists of three blocks, Petrobras is the BPRL has 25% PI in the License of exploration Block 32 Operator with 60% PI and IBV holds the remaining 40% awarded to the Indian Consortium in the 1st Offshore Bid PI. During the exploration periods, four discoveries of Round 2016, conducted by the State of Israel. OVL is the oil and gas i.e. ‘Barra’, ‘Farfan’, ‘Cumbe’ and ‘Barra#1’ Operator while IOCL and OIL are the other partners in the have been made in this concession. The Operator i.e., block, each having a PI of 25%. The seismic (2D & 3D) Petrobras concluded Extended Well Testing (EWT) in data collection, prospectivity assessment and the report on Farfan field and the EWT data is being analyzed/evaluated data evaluation, re-processing requirements, prospective for assessing reservoir extent and based on the results assessment etc. was carried out and the reports were further development activities would be commenced. submitted to Israeli Petroleum Commissioner on 28th In Potiguar (BM-POT-16) concession, Petrobras is the March, 2019. The report along with prospectivity analysis Operator with 30% PI, the other partners are IBV (20% of the block has been submitted to the regulator and the PI), Petrogal (20% PI) and BP (30% PI). The minimum submission of final report on “Drill or drop decision” is commitment activities have been completed, including expected by December 2020. drilling of one exploration well called “Ararauna” in AUSTRALIA POT-M-760. Based on the oil and gas shows observed BPRL farmed into EP - 413 (on-land) Shale Gas Block, in in Ararauna well, ANP (Regulator) has approved Ararauna December 2010 and currently has a PI of 27.803% in the appraisal plan, covering both the blocks in BM-POT-16 block in consortium with Norwest Energy NL (Operator, concession, consisting of firm commitment of drilling one 27.945% PI), and AWE Perth Pty Ltd (44.252% PI) well and G&G studies. (formerly known as Arc Energy Ltd), 100% subsidiary In Campos (BM-C-30) concession, BP with 35.7% PI is of Australia Worldwide Exploration. Pending revised the operator and other partners are IBV Brasil (35.7% PI) regulations on hydraulic fracture stimulation, the regulator and TOTAL (28.6% PI). During the exploration period in granted the extension of the permit till 22nd February, the concession, Wahoo discovery was announced. After 2023 and the activities related to the five year monitoring the completion of the exploratory period in November programme under the Environmental Management Plan 2010, the consortium decided to move on to Appraisal (EMP 2015) and the maintenance / care of the suspended phase. Under the Appraisal plan, drilling of two firm well are being taken up now. Appraisal wells, screening of Development concepts TIMOR LESTE and Pre-FEED (Front End Engineering Design) studies on identified facility options were completed. The consortium BPRL, through its wholly owned subsidiary, Bharat is studying various options including possible tie back PetroResources JPDA Limited, currently holds 20% PI in arrangement with nearby developed oil fields before any the Block JPDA 06-103. The other consortium members firm commitment is made towards field development. are Videocon JPDA 06-103 Limited & GSPC JPDA Limited, both holding 20% PI, Pan Pacific Petroleum INDONESIA (JPDA 06-103) Pty Limited holding 15% PI, Oilex Limited A subsidiary of BPRL, i.e. BPRL Ventures, Indonesia BV, (as Operator) holding 10% PI and Japan Energy E&P has PI of 12.5% in Nunukan Block in Indonesia. Other JPDA Pty Limited holding 15% PI in the said block. PSC Joint Venture partners are PT Pertamina Hulu Energi with has been terminated and Arbitration Proceedings with the 64.5% PI as Operator; and Videocon Indonesia with 23% Regulator are in progress in the International Chamber of PI. The minimum work programme committed as per the Commerce (ICC), Singapore. Production Sharing Contract (PSC) under the exploration Relinquished Foreign Block phase has been achieved. The exploratory / appraisal wells drilled in the block proved to be successful and indicated UNITED KINGDOM presence of oil and gas. The Drill Stem Tests (DST) The Plug and Abandonment activities of the well have conducted also confirmed producible hydrocarbons from been completed during the year 2019-20. these wells and has led to Oil & Gas discoveries in Badik, INDIA West Badik and Parang fields of the block. A. Operated Blocks As part of further exploratory/appraisal activities, drilling campaign in Parang / Keris fields is being planned by the i) NELP IX Block (CB-ONN-2010/8, Cambay Basin) operator. The drilling of appraisal wells in Parang field is Under NELP-IX bid round, BPRL led consortium was currently in progress. awarded one on-land block CB-ONN-2010/8, in Cambay
Annual Report 2019-20 77 basin. BPRL is the Lead Operator with 25% PI and the Operator with 60% PI. Construction activities for the other consortium partners are GAIL (India) Ltd - 25% setting up of Central Processing Facility (CPF) at PI (Jt. Operator), Engineers India Ltd (EIL) - 20% PI, BF Madanam, and laying of pipelines for evacuation of Oil/ Infrastructure Ltd (BFIL) - 20% PI and Monnet Ispat& Gas from the block are under progress. During the year Energy Ltd (MIEL) - 10% PI. Due to MIEL’s cash call 2019-20, the consortium completed drilling and testing of payment default under the Joint Operating Agreement three development wells. The block currently has a daily (JOA), the other non-defaulting parties have agreed to average oil production of 1750 BBLs. During the financial distribute MIEL’s 10% PI in proportion to their existing year 2019-20, 659,530 barrels (104,857m3) of oil and share for which a request has been submitted to Director associated gas of 30,741,107m3 has been produced from General of Hydrocarbons (DGH) for approval and the the block. matter is under active consideration at DGH. There v) NELP VI Block (CY-ONN-2004/2, Cauvery Basin) are two discoveries in the block CB-ONN-2010/8 in exploratory wells Pasunia#01 (PA#01) and Pasunia#02 BPRL has a PI of 20% in an On-land Block CY-ONN-2004/2 (PA#02). The approval of Petroleum Mining Lease (PML) in Cauvery Basin wherein ONGC is the Operator with from Govt. of Gujarat has been received on 26.02.2019 80% PI. The FDP was approved on 13.7.2017 and for a period of 15 years. Environmental Clearance (EC) for accordingly the block has entered into the Development starting production and development activities has been Phase. The first two development wells drilled as per the granted by MoEF&CC on 30.07.2019. Presently, various development plan did not yield the desired results due to tendering activities are in progress for implementation of which additional studies like Critically Stressed Fracture approved the Field Development Plan (FDP). (CSF) and Geo-Mechanical studies are currently being undertaken by the operator to firm up the way forward. ii) OALP I Block (CB-ONHP-2017/9, Cambay Basin) vi) NELP VII Block (RJ-ONN-2005/1, Rajasthan Basin) The block CB-ONHP-2017/9 in Cambay basin, Gujarat was awarded to BPRL as Operator with 100% PI BPRL has a PI of 33.33% in RJ-ONN-2005/1, an On- under OALP Bid Round- I and the Revenue Sharing land block in Rajasthan in consortium with Hindustan Contract (RSC) of the block was signed with Govt. of Oil Exploration Corporation (HOEC, 33.34% PI), and IMC India on 01.10.2018. BPRL farmed out 40% PI in the Limited (33.33% PI). HOEC is the Lead Operator and block to ONGC on 23.12.2019. Petroleum Exploration BPRL is the Joint Operator of this block. The Petroleum License (PEL) has been granted by Govt. of Gujarat on Exploration License (PEL) for the block was granted by the 25.07.2019. Processing of the existing raw 3D data Government of Rajasthan on 13th July, 2009. BPRL and has been completed and interpretation is in progress for IMC have submitted joint proposal for recommencement identification of drillable prospects. of exploration activities in the block in order to complete iii) DSF Blocks the MWP commitments of drilling of six wells after the Lead Operator HOEC expressed interest to withdraw BPRL has also been awarded 5 Contract Areas (2 from the block. The proposal is under consideration offshore and 3 onshore) through the Discovered Small by DGH. Field (DSF) bid rounds of 2016. The two offshore blocks (B15 and B127E) are in the Mumbai Offshore basin, two vii) NELP IX Blocks in Rajasthan (Bakhri Tibba and Sadewala) and one in In the Cambay Basin, CB-ONN-2010/11, an On-land Cauvery Basin, Tamil Nadu (Karaikal). PML for Karaikal block was awarded by GOI to a Consortium consisting is yet to be received while the PML for other blocks of GAIL, BPRL, EIL, BFIL and MIEL. GAIL with 25% PI is has been received. Based on the in-house Geological the Operator of the block. BPRL with 25% PI is the Joint & Geophysical (G&G) studies, a techno-commercial Operator of the block. Due to MIEL’s cash call payment analysis was carried out for the Contract Areas B15, default under the JOA, the other non- defaulting parties B127E, Bakhri Tibba and Sadewala The report has been have agreed to distribute MIEL’s 15% PI in proportion submitted to DGH and is awaiting the approval of the to their existing share for which a request has been Management Committee in this regard. submitted to DGH for approval. The FDP of Galiyana 1 has th B. Non Operated Blocks been approved on 10 February, 2020 and an additional area of 13.43 sq. km falling beyond the block area has iv) NELP IV Block (CY-ONN-2002/2 Madanam Field, also been granted for development activities which are in Cauvery Basin) progress. M/s BFIL is not participating in the development BPRL has a PI of 40% in an On-land Block CY- plan, whose PI is unconditionally transferred to the ONN-2002/2 in Cauvery Basin wherein ONGC is the Operator M/s GAIL.
78 Bharat Petroleum Corporation Limited In the Assam Basin, AA-ONN-2010/3, an On-land block multiple registered financiers can participate. BPCL started was awarded by Government of India to a consortium invoice discounting for MSME vendors from December consisting of OIL, ONGC and BPRL. OIL with 40% PI is the 2018 onwards. During 2019-20, BPCL discounted 1920 Operator of the block. BPRL is having 20% PI and ONGC invoices valuing ` 100 crores as against ` 30 crores holds 40% PI in the block. The Petroleum Exploration during 2018-19. License (PEL) for the block was granted by the Government In pursuance of the vision of centralisation, digitalisation of Assam with effect from 12th December, 2013 which is th and automation, BPEC centralized processes like valid up to 11 December, 2020 Pre-drilling activities for customer account clearing, collection management, the committed MWP well are currently in progress. dispute management, clearing of NEFT / RTGS amounts MB-OSN-2010/2, a shallow water offshore block held in bank clearing accounts, issue of debit / credit in Mumbai Offshore basin was awarded by GOI to notes and customer master governance for all SBU’s a consortium consisting of OIL (operator, 50% PI), and entities. This has helped in bringing effective controls HPCL (30% PI) and BPRL (20% PI). The proposal for and governance in customer accounts. Further, frequent relinquishment of the block MB-OSN-2010/2 has been communication with the customers has led to increased approved by DGH and relinquishment is in progress. transparency and enhanced trust. viii) OALP I blocks BRAND & PUBLIC RELATIONS BPRL farmed into the OALP – I block AA-ONHP-2017/12 The Corporate Brand & PR team has assiduously built with PI of 10% in December 2019. The other consortium on the foundation of a vaunted brand image through the partners of the block are OIL (60% PI) as operator, IOCL years. Aided by the refining, marketing and upstream arms (20% PI) and NRL (10%). The total block is 489 sq. km of the Company, BPCL has been delivering functional and in area of which 488.50 sq. km is located in Assam, social expectations of the public on one hand and crafting 0.5 sq. km is located in Arunachal Pradesh. PEL for the a unique identity on the other, leading to an enviable respective block areas were granted by Govt. of Assam reputation in corporate circles. rd on 3 July, 2019 and Govt. of Arunachal Pradesh on Reputation Management 18th December, 2019. Brand & PR employed a three pronged strategy to boost BPRL farmed into the OALP – I block CY-ONHP-2017/1 the Company’s reputation by firstly, providing media with PI of 40% in December 2019. The other consortium support to initiatives undertaken by SBUs and Entities; partner in the block is ONGC (60% PI) as operator. secondly, by positive storytelling on achievements and Out of the total block area of 731 sq. km, 579 sq. contributions to society and thirdly, by leveraging social km is onshore area and the remaining 152 sq.km is media. offshore area. PEL has been granted for the offshore area and the Operator is awaiting PEL grant for the Using the platform of a Reputation Strategy Meet, location onshore area. heads and key role holders were anointed as members of the Bharat Petroleum Response Force (BPRF) to uphold BUSINESS PROCESS EXCELLENCE CENTRE (BPEC) the reputation of BPCL in all their endeavours. BPCL has During the year 2019-20, BPEC processed 4.43 Lakh unleashed the power of Online Reputation Management invoices amounting to ` 14,500 crores. There was a (ORM) as a potent online listening and responding tool marked improvement in the processing cycle with more to improve the equity of Brand Bharat Petroleum. With than 85% of the invoices being processed within 3 to 15 this robust ORM tool, BPCL is equipped to monitor and days of receipt at BPEC. respond to around 20,000 conversations across the Micro Small and Medium Enterprises (MSMEs) play a Internet every month. The ORM tool helps in monitoring vital role especially for a developing country like India, by feedback, suggestions and complaints and also generates contributing to its economic growth, stability and providing reports on parameters like demographics and sentiment employment opportunities, thereby reducing the poverty analysis. With the rising popularity of digital and social level. To give strength to Government of India’s vision, media, customers have increasingly resorted to these BPCL has created a separate cell for MSMEs to ensure modes of communication; hence, resolution of these uninterrupted payments to MSME Vendors in particular. complaints have been accorded top priority. Trade Receivables Discounting System (TReDS) is a Active Social Media Presence digital platform to support MSMEs to get their invoices Various digital initiatives and unique campaigns have financed at a competitive rate through an auction wherein helped BPCL enhance and amplify its presence and
Annual Report 2019-20 79 customer engagement on social media. BPCL owned communication strategy entailed reaching more than one social media assets like Facebook, Twitter, LinkedIn, crore people, through a combination of videos and static Instagram and YouTube were leveraged to promote digital posts on BPCL’s work, people and activities. There were content for enhancing the BPCL brand. Some of the major celebrity testimonial videos to promote BPCL’s Corona campaigns like MAK Oil Change, BPCL SBI Co-branded Warriors, vast media coverage, both print and digital, card, Bharatgas on Amazon, Bharat First, Har Ek Kaam covering the entire supply chain, showcasing how the Desh Ke Naam and Corona Warriors gained tremendous Company is responding to various consumer segments. traction. Younger followers of BPCL’s Instagram handle were The BPCL Facebook page achieved a historic milestone engaged with celebrity chats. of one million followers. With this achievement, BPCL BPC Tarang now stands tall with the highest number of Facebook The in-house radio channel, BPC Tarang was revamped followers in the oil and gas industry in India. BPCL has and repositioned to reach out to employees with relevant, developed a positive and active social media culture with informative, educational and motivational content, a strong follower base of over 13.34 lakhs, more than blending in a bit of entertainment. Episodes were 800 lakh impressions, 170 lakh video views and 50 lakh broadcast, covering psychologists and doctors, to help engagements. employees cope with the evolving situation during the Knowledge Exchange lockdown. Team IS educated employees on the use of BPCL has also participated in many major conferences various technical tools for work from home. To motivate like the Refinery Technology Meet (RTM) organized by employees, the ‘Salute Corona Warriors’ series was Centre for High Tech, CERA Conference by FIPI, 17th also launched, showcasing the frontline staff, including National Conference by Engineering Council of India, 44th workmen. All India Public Relations Conference by Public Relations Brand studies show that post this pandemic, Society of India, International Conclave on Occupational brand communications will leave the age of hyper- Health by Indian Association of Occupational Health, 47th individualization and move into a period in which society National Convention for Company Secretaries organized and social thinking are valued commodities. Brand BPCL by Institute of Company Secretaries of India, apart from will continue to follow this communication strategy. many others. AWARDS & RECOGNITION As a corporate working towards uplifting the weaker In the prestigious Fortune Global 500 list for 2020, BPCL’s sections of society, BPCL regularly contributes to various rank is 309. BPCL’s rank is 601 in the Forbes Global 2000 fund-raising events organized by NGOs. Moreover, as list for 2020, a considerable rise from the rank of 628 a good corporate citizen, BPCL has sponsored many in the 2019 list. For its outstanding global, financial and events organized by the Indian Express, CII, Bombay industry performance, BPCL has been ranked among the Management Association, Indian Society of Training top 20 Oil and Gas Refining and Marketing companies in & Development, Global Compact of India, ASSOCHAM the Platts Top 250 Global Energy Company Rankings for and SCOPE, to name a few. BPCL also associated with 2019. BPCL ranks 4th in Oil & Gas Refining and Marketing Somaiya Institute of Management Studies and Research, in the Asia/Pacific Rim, 7th in Oil & Gas Refining and Mumbai in a Case Study Challenge to build Brand Equity Marketing globally and 12th in overall performance in the for BPCL amongst the student community. Asia/Pacific Rim. On an overall global performance, BPCL Braving the COVID-19 Pandemic has been ranked 44th. The COVID-19 pandemic has impacted the whole world BPCL received the Federation of Indian Petroleum Industry and redefined the way we do business. BPCL has (FIPI) Oil & Gas Award 2019, under the category ‘Oil responded swiftly and efficiently to the changing dynamics, Marketing - Company of the Year’ for leading performance remaining true to its core purpose of ‘Energising Lives’ of for Direct and Retail Sales through customer-centric the nation. All functions have gone the extra mile to render initiatives. service, especially the LPG & Retail SBUs in Marketing At the Refining and Petrochemical Technology Meet and the Refineries ensuring product availability. (RPTM 2020), while Kochi Refinery (KR) was declared Brand & PR synchronised social, digital and print the Winner in ‘Innovation Awards 2018-19’ under the media to create a brand image of the Company as the ‘Innovation in Refinery’ category for BPMARKK (Usage major value contributor for individuals and society. The for Predicting Crude Yields), Mumbai Refinery (MR)
80 Bharat Petroleum Corporation Limited received the Innovation Award for in-line Crude Blending. Improving Separation Efficiency and its Application for Corporate Research & Development Centre (CRDC) Maximizing Gasoline Production in Refinery. CRDC was adjudged the ‘Winner’ under the ‘Best Innovation in was also conferred the ‘Sustainability Award for the R&D Institute’ category for ‘K Model: Quick & Accurate Best Green Product in the Petrochemical Sector’ for Prediction of Crude Oil Blend Compatibility and Blend ‘Development & Commercialisation of Indigenously Optimisation of N Number of Crude Oils’. CRDC was also developed Gasoline Sulphur Reduction Catalyst (Bharat awarded a Commendation Certificate for the development GSR CAT) for Refineries’ during the Federation of Indian of ‘Bharat-Divided Wall Column Technology’. KR received Chambers of Commerce and Industry (FICCI) Chemicals the Refinery Performance Improvement Award (Second and Petrochemicals Awards 2019. Prize) for commendable performance among Indian BPCL bagged the ‘Best-In-Class Supply Chain and Refineries and MR got the Best Conceptualisation and Procurement Diversity Initiative’ Award from Express Representation prize under “Best Poster” category for Logistics & Supply Chain (ELSC) for widening of crude its Intelligent Plant Concept on Digital start-up – Gasoline oil baskets and their ranking based on economics, which Treatment Unit, using state-of-the-art Business Wi-Fi helped in sourcing 8 new crude oil grades and procuring network and mobility solutions. crude oil from 18 different countries from 6 continents in MR was adjudged the winner for 2018-19 in the Inter- the year 2018-19. BPCL was also adjudged the Winner in Refinery Swachhata Ranking for 18 PSU Refineries, by the Manufacturing Supply Chain Awards 2020 presented Centre for High Technology (CHT). Another feather in its by Future Supply Chain Solutions Limited, under the cap was the ‘Certificate of Merit’ under National Quality category of ‘Quality Excellence in Planning, Processes & Award & ‘MQH - Best Practices Competition’ conducted Systems’ for its initiative of “Reduction in Transportation by IMC - RBNQA (Ramkrishna Bajaj National Quality and Logistics Cost by developing a Pan-India model for Award) Trust, Mumbai. Secondary Optimization” in the Company. MR achieved ‘Silver’ Rating in the assessment for Internal Audit won the ‘Excellence Award’ in the ‘Best ‘Green Co’ by CII , and was the first Refinery to be rated Application of Technology’ category, for the implementation under ‘Green Co’ Rating Certification. MR bagged the of ‘One Click’ Audit and leveraging technology as a tool in India Manufacturing Excellence (Future Ready Factory improving internal controls and governance from Institute under Platinum Category) from M/s Frost & Sullivan, in of Internal Auditors. BPCL bagged the Digital PSU Award recognition of the excellence achieved in the areas of at the 7th PSU awards, organised by Governance Now superior leadership, technological innovation, customer for two digital initiatives - Retail Auto Invoicing System service and strategic product development. MR also (RAIS) and Leveraging Machine Learning for solving IT bagged a Prize in the ‘Boiler 2020 Competition’, issues in BITSS (BPCL IT Services System - for IS related conducted by Inspectorate of Boilers. Complaints Management). Integrated Expansion Refinery Project (IREP) at KR was Corporate HSSE received the ‘Order of Merit’ Award adjudged as the Winner of the ‘Top Refining Project of under the category ‘Sustainability’ and Kochi Refinery the year 2019’ by the international journal, Hydrocarbon won the Silver Award under the category ‘Green Processing (HP). KR bagged the Apex India Platinum Initiatives’ at the SKOCH Leadership Awards. HSSE also Award 2019 for Occupational Health and Safety for the won the Corporate Governance and Sustainability Vision Propylene Derivative Petrochemical Project (PDPP) for Award 2020 from the Indian Chamber of Commerce the second consecutive year. The PDPP received the (ICC) for taking positive steps to manage and measure Safety Innovation Award 2019 from the Institution of its economic, environmental and social performance and Engineers (India). KR also received the HSE Excellence integrating sustainability into core business model. Oil & Gas Company of the Year Award 2019 for the The Golden Peacock Sustainability Award was conferred third consecutive year by the Synnex Group. Yet another on HSSE for outstanding contribution, commitment, achievement for KR was the SKOCH Order-of-Merit professionalism and actions that made a visible impact on Certificate for its Safety Management System. Sustainability and Environment. Yet another achievement CRDC bagged three Awards during the Frost & Sullivan was the Responsible Business of the Year Award from Project Evaluation & Recognition Program (PERP) 2019 Social and Business Enterprise Responsible Awards under the category ‘Process Innovation Leadership’ in (SABERA) for excellent contributions towards Community, the Manufacturing Sector. These were the Winner Award Sustainability and Environment. HSSE also received the for Bharat-Divided Wall Column (B-DWC) Technology: Gold Category award for Global Sustainability 2019 by
Annual Report 2019-20 81 Energy and Environment Foundation in recognition of its the Oil Industry’ for year 2019-20 by the Department of outstanding contribution, professionalism, commitment Factories & Boilers, Industrial Health and Safety, Govt. of and action towards positive impact on the environment. Karnataka. KR won the National Institute of Personnel Management INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY (NIPM) Kerala Chapter Best Corporate Citizen Award The Corporation has a robust internal control system among large companies for the third consecutive year. (including Internal Financial Controls over Financial KR also bagged top honours for Health, Education and Reporting) that facilitates efficiency, reliability and Women Empowerment in the Rotary CSR Awards completeness of accounting records and timely 2019. KR also won the Kerala Management Association preparation of reliable financial and management (KMA) CSR Awards 2019 for Education for the Roshni information. The internal control system ensures Educational Project for the children of inter-state workers. compliance with all applicable laws and regulations, BPCL’s resounding performance during the Swachhata facilitates an optimum utilization of resources and protects Pakhwada in July 2019 won the First place among Oil & the Corporation’s assets and interests of investors. The Gas PSUs for 50,020 activities. Mumbai Refinery bagged Corporation has a clearly defined organizational structure, the first place among refineries and BORL secured the well documented decision rights, detailed manuals third place. and operating procedures for its business units and service entities to ensure orderly and efficient conduct BPCL won Awards for its In-house magazine - Petro Plus of its business. The internal control systems (including and Corporate Intranet – I-Connect at the Annual Awards Internal Financial Controls over Financial Reporting) are of the Association of Business Communicators of India reviewed on an ongoing basis and necessary changes are (ABCI). BPCL bagged several awards at the Public carried out to align with the changing business/statutory Relations Society of India (PRSI) National Awards 2019 requirements. for Excellence in the field of Communications and Public Relations – Best Corporate Website, Best Use of Social The state-of-the-art ERP solutions (SAP) and Business Media in Campaign for the MAK Oil Change campaign, Information Warehouse has inbuilt controls including the Best Use of Social Media for PR & Branding for BPCL authorization controls. This further enhances controls Customer Service, Best House Journal (Hindi) and Best and seamless exchange of information with access PSU Implementing RTI. BPCL was awarded First Prize by controls. The SAP systems provide an audit trail of the SCOPE for the Best Corporate Communication Campaign transactions. The Corporation has a whistle blower policy & Program at the SCOPE Corporate Communication and anti-fraud policy to address fraud risk. Excellence Awards 2019. The Corporation’s independent Audit function, consisting of professionally qualified persons from accounting, KR won the prestigious Rajbhasha Rolling Trophy 2019 of engineering and IT domains, review the business Kochi Town Official Language Implementation Committee processes and controls to assess the adequacy of the (TOLIC) for the Best Implementation of Official Language internal control system through risk focused audits. The among PSUs in Kochi. They also received the Trophy for Internal Audit Department plans the annual audit plan to the Best Hindi House Magazine for JwalaDwani Varshiki. cover various aspects of the business. The audit reports KR was adjudged the winner of the ‘Suraksha Puraskar published by the Internal Audit Department are shared 2019’ in the Very Large Industries category by the with the Statutory/Government Auditors, who review National Safety Council of India, Kerala Chapter and the the efficacy of internal financial controls. Key business Department of Factories & Boilers, Govt. of Kerala for the process changes have been reviewed by the internal team year 2019. before implementation. Bareilly LPG Plant won the 4th level Award Prashansa The Audit Committee of the Board regularly reviews Patra in the NSCI Safety Awards – 2019 among the MSME significant findings of the Internal Audit Department Sector across India. Bangalore LPG Plant was awarded covering operational, financial and other areas and for ‘Outstanding Performance in Best Safe Practices in provides guidance on internal controls.
82 Bharat Petroleum Corporation Limited DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS In Accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key financial ratios along with detailed explanations are given below:
Sl. Ratio Type Unit 2019-20 2018-19 Variation Explanation for changes No. (In %) 1 Debtors Turnover Ratio No. of 6.62 6.41 3.17% Days 2 Inventory Turnover No. of 23.46 23.01 1.96% Ratio Days 3. Interest Coverage Ratio Times 3.96 11.33 -65.05% The interest coverage ratio (Profit Before has declined during current interest and Tax + year as compared to previous Depreciation)/Finance year mainly on account of cost substantial decrease in profit before tax from ` 10,439.62 Cr to ` 2,671.04 Cr coupled with increased finance cost 4. Current Ratio Times 1.10 1.12 -2.12% 5. Debt Equity Ratio Times 1.26 0.79 59.49% Debt Equity Ratio has increased (Excluding Lease due to higher borrowings obligation) during the year. Borrowing has increased mainly on account of capital expenditure coupled with lower internal accruals during the year. 6. Operating Profit Margin % 0.21 2.22 -90.75% The variation in operating profit Ratio (OPM) margin ratio is mainly due to OPM = (Profit before significant decrease in the Exceptional Items Operating Profit Margin during and Tax minus Other the year. The Operating Profit Income)/Sales Margin has been reduced mainly due to significant decrease in Refining Margin coupled with depreciation of Indian Rupee vis-à-vis Dollar which has resulted in significant foreign exchange loss during the current year. 7 Net Profit Margin Ratio % 0.82 2.12 -61.22% The net profit margin ratio has declined mainly on account of reduced profit after tax 8 Return on Net Worth % 8.00 19.41 -58.78% The return on net worth has declined mainly on account of reduced profit after tax
Annual Report 2019-20 83 ANNEXURE TO THE DIRECTORS’ REPORT
Annexure A Particulars in regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to the Companies (Accounts) Rules, 2014. A. Conservation of Energy Efforts made by BPCL in regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo which are as under : (i) Steps taken or impact on conservation of energy Mumbai Refinery Utmost importance has been accorded to energy conservation efforts and Mumbai Refinery has in place a sound and effective Energy Management System (EnMS), accredited & upgraded with ISO 50001:2018 certification by M/s DNV. Continuous monitoring of energy performance and keeping abreast of the latest technologies for energy conservation have helped to achieve a robust energy performance during the year. Persistent efforts helped to achieve significant reduction in Specific Energy Consumption to 62.5 Million British Thermal Unit per barrels per Energy Factor (MBN) in 2019-20, as compared to 64.5 MBN during the year 2018-19. This improvement is attributed to sustained operation at higher intake level of energy efficient CDU4, higher capacity utilization of secondary process units, the energy champion scheme and various energy conserving efforts undertaken during the year. Totally 28 Encon schemes were implemented which helped to save 19,882 MTOE/year and to reduce CO2 emission by 62,742 MT/year. Mumbai Refinery completed a Monitoring & Verification Audit on 23rd July’19 for BEE PAT-2 cycle which concluded in March’19. MR achieved MBN of 64.5 in 2018-19, much lower than the PAT-2 MBN target of 72.1. This is equivalent to Energy Saving Certificates (ESCerts) of 83,996 and can be traded with a valuation of around ` 84 Crores. As a part of the ED’s ENCON Awards Scheme, sustainable energy savings of 6,581 MTOE/year was achieved by implementing the various ENCON initiatives, resulting in reduction of MBN by 0.53. The following are the measures taken up at MR for energy conservation: • Relentless efforts being taken by Mumbai Refinery to achieve zero steam leaks. Unit-wise daily stringent monitoring of steam leaks being done. • Continuous monitoring & control of all parameters of Furnaces & Boilers. • Online chemical cleaning of furnaces to clean off fouling and deposits on the radiation tubes leading to better heat absorption in the radiation section. • Continuous recovery of flare gas with the help of FGRS and stringent monitoring of process conditions to control flare loss. • Continuous Survey of PSV/PCV to identify passing valves and rectification to reduce flare loss. • Periodical Survey of Compressed air and Nitrogen leaks and rectification. • Provision of superior insulation on steam headers to reduce surface heat loss. • Implementation of various Advanced Process Control (APC) strategies in RMP ARU, SWS-1 & SWS-2 to reduce energy. Kochi Refinery The following energy conservation and loss control measures were adopted during the year 2019-20, resulting in significant fuel savings: • Conversion of WGC in the Fluidized Cracking unit from steam driven turbine to 2.5 MW high efficiency VFD driven motor.
84 Bharat Petroleum Corporation Limited • Optimization of stripping steam in columns and velocity steam in heaters. • Optimization of cooling water system. • Optimization of hot water belt in PFCCU. • Replacement of conventional lighting with LEDs. (ii) Steps taken by the Company for utilizing alternate sources of energy Mumbai Refinery First Refinery in India to convert 100% of conventional lights into LED lights leading to power savings of 9,840 MWH/annum, benefit of ` 9.6 Crores & reduction in CO2 emission by 7,085 MT/annum. Kochi Refinery Embarked on the journey of replacing conventional light into energy efficient LED’s. So far 2122 lights have been replaced. (iii) The capital invested on energy conservation and estimated savings Mumbai Refinery Sl. Description of Schemes in FY 2019-20 Capital Energy Savings No. Investment Fuel Power (` Crores) (MT/ (MWH/ Year) Year) 1 Optimization of CCR RGC RPM from 7200 to 6950 for saving steam. Nil 476 2 Replacement of 3505 Non flameproof light fittings with LED for 0.69 540 saving power. 3 Replacement of existing raw water supply pump 139-P-901A in DM 0.13 160 plant by new low life cycle cost (LLC) pump for saving power. 4 Implementation of APC in RMP ARU, SWS-1 & SWS-2 for saving Nil 3244 steam. 5 Implementation of APC in CDU3 for saving steam. Nil 476 6 Optimization of ARU Benzene Column overhead load for saving Nil 524 steam. 7 Implementation of APC in DHT for saving steam. Nil 691 8 Replacement of steam driven old pump of RMP bearing cooling 0.185 1191 water supply (139-P-908A) by new LLC pump for saving power. 9 Replacement of existing 28 metallic blades of AFC’s in CDU4 with 1.11 913 new generation energy efficient FRP blades for saving power. 10 Implementation of Steam Trap Management System in CDU4 for 4.3 4048 saving steam. 11 Provision of CORROCOAT in MOC water pumps P1 & P2 for 0.1 96 efficiency improvement leading to saving power. 12 Replacement of steam ring in FCCU reactor for saving steam. Nil 286 13 Replacement of existing 6 metallic blades of AFC’s in CCR with new 0.22 319 generation energy efficient FRP blades for saving power. 14 Implementation of Steam Trap Management System in DHT for 0.45 445 saving steam. 15 Provision of Welded Plate Type heat exchanger in place of 2.5 952 Conventional Shell & Tube heat exchanger in DHDS ARU for saving steam. 16 Replacement of Centac Compressor at BBU for saving power. 1.26 752 17 Supply of Hot Lean Amine from RMP ARU and Stoppage of Existing 2.75 1190 Lean Amine LP steam Preheater in HCU for saving steam.
Annual Report 2019-20 85 Sl. Description of Schemes in FY 2019-20 Capital Energy Savings No. Investment Fuel Power (` Crores) (MT/ (MWH/ Year) Year) 18 Recirculation of hot sour water from the CDU4 crude column 0.58 1048 hot reflux drum (144-V-102) as wash water in the overhead exchangers(144-E-102 A/B/C/D) for saving steam. 19 Dropping of DHT vacuum dryer inlet temperature, thereby improving Nil 1100 preheat for saving fuel. 20 Maximization of heat recovery in NHGU BFW and product cooling Nil 429 section through APC strategy for saving steam. 21 Provision of Electrical tracing on FO supply line to CDU3, HCU, 4.5 952 -1776 LOBS, CDU4, RFU & ARU (Both OSBL & ISBL) for saving steam with additional power consumption. 22 Provision of CORROCOAT in MOC water pump P4 for efficiency 0.06 48 improvement for saving power. 23 Interconnection of the discharge header of CPP and Boiler House 0.08 440 DM water pumps and stopping Boiler House DM water pump for saving power. 24 Commissioning of Solar Power plant for power generation and 2.96 738 thereby reduction in equivalent power import. 25 Pressure reduction in HCU Tail gas KOD V 276 from 11 Kg/cm2 to 0.1 1317 6 Kg/cm2 for saving power. 26 Replacement of existing Cooling water Supply pump P1 in CPP by 0.083 176 new LLC pump for saving power. 27 Diversion of Oxygen rich VPSA outlet to FCCU MAB suction for 0.392 1071 saving steam. 28 Stoppage of Fuel Oil consumption in HCU/LOBS/ARU heaters & Nil 1190 HEBs in view of 100% gas firing for saving steam. Total 22.5 19313 3723 Kochi Refinery Sl. Description of Schemes in FY 2019-20 Capital Energy Savings No. Investment Fuel Power (` Crores) (MT/ (MWH/ Year) Year) 1 Single column operation of NSU 1 Nil 229 2 CDU2 Kero stripping steam reduced by packing replacement and 0.65 1212 operational changes 3 Optimization of Velocity steam to vacuum heater, Stripping steam to Nil 2909 vacuum column and to crude column in CDU3 4 VFD provided for IGP 112A/B motor Product diesel pump in DHDT Nil 1600 5 FCCU WGC2 drive is changed from MP steam to 2.5 MW high 18.2 1978 efficiency VFD motor. 6 Cooling Water tie-up in IREP CW and stopping UCT-5 Pump UP-25. Nil 2569 7 DMW to MUH & CST pump discharge results in stoppage of BFW Nil 2927 transfer pump to deaerator A/B 8 Optimizing PFCCU Hot water belt flow through exchangers & Nil 5800 Stopping one Hot water belt Pump
86 Bharat Petroleum Corporation Limited Sl. Description of Schemes in FY 2019-20 Capital Energy Savings No. Investment Fuel Power (` Crores) (MT/ (MWH/ Year) Year) 9 Minimization of PFCCU reactor Riser bottom steam by introduction Nil 498 of C4 Recycle. 10 Stripping /re-boiling steam optimization in PFCCU columns Nil 1291 11 Using Nitrogen to substitute a part of Fuel Gas for CEMP-2 flare Nil 438 purging 12 CCR Recycle gas ratio optimizations Nil 124 13 Chemical Grade Propylene production in PFCCU-PRU with zero Nil 6654 re-boiling in C3 Stripper Total 18.85 13355 14874 B. Technology Absorption Mumbai Refinery i. The efforts made towards technology absorption and the benefits derived like product improvement, cost reduction, product development or import substitution: a. With the implementation of MARPOL specifications (FO with 0.5 wt. % Sulphur), started producing a new product - Very Low Sulphur Fuel Oil (VLSFO) in line with IMO regulations. b. Gasoline Treatment Unit (GTU) was commissioned ahead of schedule by 5 months in Oct’ 19 within the approved Capital Budget and was operated at 100% capacity within 20 days of commissioning. This enables MR to produce 100% BS VI MS. c. CDU4 stabilizer was revamped with high capacity trays to increase capacity by 33%. This enhances Crude oil processing capacity and flexibility to process high API Crude oils for improving the margin. d. LOBS Unit: Replacement of catalyst in IDW / HDF Reactors along with modification in the unit increased LOBS production capacity to 400 TMTPA. e. Completed implementation of Advanced Process Control optimization in all major process units of the Refinery. ii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): (a) The details of technology imported and (b) the year of Import: Sl. No. Unit - Technology Licensor Year 1 New Hydrogen Unit - Revamp M/s. Haldor Topsoe, Denmark 2017 2 Diesel Hydro Treater (DHT) Unit M/s. Haldor Topsoe, Denmark 2017 3 Hydrocracker Unit - Revamp M/s. Chevron, USA 2017 4 NHT- Isomerisation Unit M/s. GTC, USA 2017 5 VPSA Oxygen Unit M/s. Linde, Germany 2018 6 Gasoline Treatment Unit (GTU) M/s. Axens, France 2019 (c) Has technology been fully absorbed? Yes. (d) If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action. Not Applicable.
Annual Report 2019-20 87 Kochi Refinery i. The efforts made towards technology absorption and the benefits derived like product improvement, cost reduction, product development or import substitution: a. Chloride Guard bed was installed in the light reformate stream of Continuous Catalytic Reformer (CCR) to Aromatic Recovery Unit (ARU), which will help to trap Chlorides and avoid corrosion issues in ARU. b. FCC/PFCC moving bed catalyst was reformulated for maximising MS/Diesel. c. Divided Wall Column (DWC) Technology was successfully implemented in Gasoline splitter unit to produce better quality of feedstock for CCR and ISOM unit. d. For production of BS-VI grade fuels (less than 8 ppm sulphur), existing Catalyst was replaced with new generation catalyst in DHDT, VGO-HDT units. e. Filter/Coalescer installed in NHT (CCR) feed line to trap moisture and corrosion products, which will help in avoiding reactor pressure drop and unit shutdown. f. To maximise ATF production, additional reactor commissioned in KMU. g. New grade of MTO-Regular (IBP-145, FBP-245 deg. C) was launched as an import substitute. h. Started production of new product-Very Low Sulphur Fuel Oil (VLSFO). ii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): (a) Details of technology imported (during last 3 years) and (b) year of import
Sl. Unit - Technology Licensor Year No. 1 Acrylic Acid Unit M/s. Air Liquide E&C, Germany* 2016 2 Oxo Alcohol Unit M/s. JM Davy Process Technology, UK* 2016 3 Acrylates Unit M/s. Mitsubishi Chemical Corporation, Japan* 2016 4 Naphtha Hydro-treating Unit M/s. UOP, USA 2017 5 Light Naphtha Isomerisation Unit M/s. UOP, USA 2017 6 Continuous Catalytic Reformer Unit M/s. UOP, USA 2017 7 Propylene Oxide Unit M/s. Sumitomo, Japan 2019 8 Propylene Glycols (PG) Unit M/s. Huntsman, USA 2019 9 Polyols Unit M/s. Scientific Design, USA 2019 10 Ethylene Recovery Unit M/s. Technip, UK 2019 11 Ethylene Oxide / Ethylene Glycol M/s. Scientific Design, USA 2019 (EO/EG) Unit 12 Cumene Unit M/s. UOP, USA 2019 *Year 2016 technologies are considered and mentioned above, as these technologies aren’t commissioned and absorbed by BPCL yet (Units constructed and in commissioning phase). (c) Has technology been fully absorbed? No.
88 Bharat Petroleum Corporation Limited (d) If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action Items 1-3: Units constructed and in commissioning phase Items 4-6: Units under construction phase Items 7-12: Units under engineering phase Research and Development (R&D) 1. Specific areas in which R&D has been carried out 1. Energy efficient distillation process based on Divided Wall Column (DWC) technology 2. Vapour recovery system (VRS) 3. Simulation models for refinery units 4. Desalter technology development 5. Crude oil pipeline corrosion inhibitor development 6. Process Intensification 7. Digitization approach for crude assay and blending options 8. Catalyst and catalytic processes 9. Residue upgradation
10. CO2 valorization 11. Energy efficient furnace operation 12. Biofuels and bio-chemicals 13. Bioremediation of oil spills 14. Efficient LPG burner design 15. Petrochemicals and Petrochemical processes 16. Low grade heat recovery 17. IMO grade fuel oil production 18. Synthetic Petrol engine oil for latest generation passenger cars fitted with modern after treatment devices 19. Engine oil for modern 4-stroke Motorcycles 20. High performance gas engine oil with extended life 21. Food grade lubricants 22. General transmission oil for 3 wheeler EV 23. Specialty lubricant for textile industry 24. Rust Preventive oils for automotive ancillaries for long term protection 2. Benefits derived as a result of the above R&D 1. BPMARRK®, crude oil characterization software, has enabled refineries to handle crude switchovers efficiently and helped to avoid unplanned shutdowns. Regular use of BPMARRK® has resulted in monetary benefit of about ` 175 Crores during the year. 2. In-house crude oil blend compatibility analysis tool, K Model, helped refineries to analyse more than 800 crude oil blends for optimal crude oil blend processing. The value addition by K Model is about ` 45.83 Crores and significant time savings (Laboratory takes one week’s time for analysing one blend compatibility as compared to few minutes by K Model). 3. Preliminary results of the vapour recovery system installed at a BPCL Retail Outlet (RO) showed more than 80% reduction in hydrocarbon emission during unloading of tank lorries
Annual Report 2019-20 89 at RO. It is expected to reduce the VOC emission by 2.6 ton/year for an RO capacity of ~300 kl/month. 4. Data driven models were successfully developed for predicting product quality and minimizing product give away during crude oil switchover. 5. R&D efforts in the field of desalter design have resulted in three new desalter internal designs. Trials have proven the superiority of these novel designs over the conventional desalter internals which has led to development of indigenous desalter technology. 6. Designed an energy efficient and cost effective separation system for recovery of MS and HSD from the transmix formed during pipeline transportation. 7. Demonstration of in-house formulation for online cleaning of refinery furnaces has shown average 40 °C reduction in arch temperature which resulted in increase in feed throughput by about 8%. 8. Successful field trials conducted over novel in-house developed LPG burner design established burner efficiency > 72%. 9. Developed formulations for novel FCC additives (Bottom Cracking Additive, SOx additive) and state- of-the-art niche catalyst viz. Bharat-Hi3Cat for LOBS process. 10. Process know-how for petrochemical, methacrylic acid and oxo process catalysts established. 11. Process know-how to convert lignin to carbon fiber established to improve economics of a bio- refinery. 12. Process know-how for furfural alcohol production from furfural established to improve bio-refinery economics. 13. Provided recipes through use of digital technology i.e. K-Model towards successful production of IMO grade fuel oil and launch in the market. 14. Low grade energy recovery options at Kochi Refinery firmed up for implementation that would lead to energy efficient operations. 15. Synthetic petrol engine oil for latest generation passenger cars fitted with modern after treatment devices is helping to generate new business. 16. Engine oil for modern 4-stroke motorcycles would cater to their lubrication requirements and generate new business. 17. High performance gas engine oil developed for new generation autorickshaws offering better engine protection and cleanliness with longer drain intervals. This will help BPCL generate new business. 18. The demand for food grade lubricants is increasing with the increase in the size of the processed food industry nationwide as well as proliferating food safety laws. These food grade lubricants would help to enter into new segment and generate new business. 19. Development of transmission fluid for EV segment will help to tap the emerging EV market. 20. High viscosity warp sizing oil designed to improve weaving performance on high speed looms for synthetic yarn will help to generate new business in textile sector. 21. Positioning of solvent based rust preventive oils with existing grades can help in generating new business. 3. Future plan of action 1. Modelling approach for column overhead corrosion mitigation 2. Strategy to handle petrochemical plant effluents 3. Residue upgradation to value added chemicals and products 4. Waste to energy and fuels 5. Alternate fuel Di Methyl Ether process demonstration
90 Bharat Petroleum Corporation Limited 6. Process intensification based on Cross Flow Reactor concept 7. Cost optimization for bio-refineries 8. Niche petrochemical product development
9. Processes for CO2 to chemicals conversion 10. Synthetic engine oil for ultra-low emission fuel efficient passenger cars 11. Engine oil with fuel economy benefit for heavy duty BS VI commercial vehicles 12. High performance marine engine oils for new generation fuels 13. Development of white oil for industrial application 14. Hybrid Dual Clutch Transmission (DCT) Fluid for PCs/SUVs 15. Hybrid Automatic Transmission Fluid (ATF) for PCs/SUVs 16. Cold rolling oil for steel rolling 17. Automotive wheel bearing Grease for 80,000 km drain interval. 4. The Expenditure incurred on R&D during 2019-20:
Particulars Expenditure (in ` Crores)* Capital Expenditure 41.47 Revenue / Recurring Expenditure 50.71 Total 92.18
*includes P&AD Sewree C. FOREIGN EXCHANGE EARNINGS and OUTGO The details of foreign exchange earnings & outgo are given below:- (` Crores) Particulars 2019-20 2018-19 Earnings in Foreign Exchange 15,167.55 13,220.49 - Includes receipt of ` 1098.16 Crores (previous year ` 1799.60 Crores) in Indian currency out of repatriated funds of foreign airline and ` 669.19 Crores (previous year ` 677.75 Crores) of INR exports to Nepal and Bhutan of I&C, Retail and Lubes Customers. Foreign Exchange Outgo 1,10,194.67 1,11,486.10 - On account of purchase of Raw Materials, Capital Goods, Chemicals, Catalysts, Spare Parts, International Trading Activities etc.
Annual Report 2019-20 91 ANNEXURE TO THE DIRECTORS’ REPORT
ANNEXURE B ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES 1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs: “We are a Model Corporate Entity with Social Responsibility” is one of the vision statements of Bharat Petroleum Corporation Limited (BPCL). Recognising its equal responsibility towards the community near its business units and far-flung communities, BPCL has contributed steadily towards the goal of achieving sustainable development over the years. As per the Companies Act 2013, we have our CSR policy and guidelines in place, the highlights of the same being: - In every financial year, at least 2% of average net profits of the Company made during the three immediately preceding financial years is earmarked for undertaking CSR activities. - BPCL has a CSR Committee of the Board headed by an Independent Director, which regularly reviews and monitors all CSR projects. - A robust governance structure with a dedicated team of CSR professionals strives towards identifying and implementing impactful social projects, which are in alignment with the areas specified under Schedule VII of the Companies Act, 2013 of which the Company takes up CSR projects largely in the five core thrust areas of: • Education • Water Conservation • Skill Development • Health/Hygiene and • Community Development The details of the CSR policy, projects and programmes are available on the website of the Company www.bharatpetroleum.in 2. The composition of the CSR The CSR Committee of Directors comprises - Committee: 1. Shri H. P. Shah, Independent Director, Member (w.e.f. 11.02.2020) and Chairman of the Committee (w.e.f. 10.07.2020) 2. Shri Rajesh Aggarwal, Government Nominee Director, Member (w.e.f. 08.01.2020) 3. Dr. K. Ellangovan, Government Nominee Director, Member 4. Shri K. Padmakar, Director (Human Resources), Member 5. Shri N. Vijayagopal, Director (Finance), Member 6. Shri Rajesh Kumar Mangal, Chairman of the Committee, Independent Director (up to 30.11.2019) 7. Shri Rajiv Bansal, Government Nominee Director, Member (up to 07.01.2020) 8. Shri Vishal V Sharma, Independent Director, Member (up to 08.02.2020) 9. Shri V. S. Oberoi, Chairman of the Committee, Independent Director (from 30.12.2019 up to 09.04.2020) 3. Average net profit of the Company ` 9,948.82 Crores (As per section 198 of the Companies Act, 2013). for the last three financial years: 4. Prescribed CSR Expenditure for ` 198.98 Crores 2019-20: 5. Details of CSR Spend during the a. Total Amount to be spent: ` 371.23 Crores (including the carry financial year 2019-20 forward of ` 172.25 Crores of previous years) b. Amount unspent: ` 25.66 Crores (earmarked towards Covid pandemic support) c. Details of the manner in which the amount was spent - Enclosed in Attachment
92 Bharat Petroleum Corporation Limited 6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board Report. BPCL provided a budget of ` 198.98 Crores in 2019-20 and has allocated the entire budget for various projects within the items enumerated in Schedule VII, which includes several initiatives of national importance. In addition, BPCL has also carried forward ` 172.25 Crores unspent budget from previous years. Against the above allocation of ` 371.23 Crores, an expenditure of ` 345.57 Crores was incurred. The shortfall from the stipulated prescribed spends is on account of the following reason: • BPCL has committed funds towards relief and rehabilitation activities in the light of the corona virus pandemic and to other projects within identified thrust areas. Some of these are long-term projects, their expenditure will be incurred in the subsequent year. As a responsible corporate, BPCL’s constant endeavour is to complete projects which have been initiated, while ensuring the impact envisioned. In the process funds may have to be carried forward, sometimes even reallocated. The CSR funds that were unspent in the year 2019-20, despite being allocated, for the reason mentioned above, are being carried forward to the next year and will be rightfully spent/ reallocated as the case may be. BPCL commits to continue enabling inclusive growth as a core component of sustainable development through focused and proactive social projects. BPCL strives to align its CSR initiatives with missions of national importance and sustainable development goals. 7. Responsibility Statement of the CSR Committee that the implementation and monitoring of CSR policy is in compliance with CSR objectives and Policy of the Company. We hereby affirm that the CSR policy, as approved by the Board, has been implemented and the CSR Committee monitors the implementation of the CSR projects and activities in compliance with the CSR objectives.
Sd/ Sd/ Sd/ K. Padmakar N. Vijayagopal H. P. Shah Director (HR) Director (Finance) Chairman – CSR Committee Date: 10th July, 2020
Annual Report 2019-20 93 Agency-Name or Implementing Amount spent: Direct spent: Amount BPCL - Inhouse Project Balaji Heart Hospital & Diagnostic Centre BPCL - Inhouse Project BPCL - Inhouse Project Department of Fisheries, Government of Kerala PMUY / IOC Nodal Agency Habitat for Humanity India Trust Habitat for Humanity India Trust Impact India Foundation (IIF) Indian Cancer Society Kalady Grama Panchayat Manav Sadhan Vikas Sanstha (MSVS) Panvel Municipal Corporation DGP & IG Prisons 9,54,084 90,28,140 period ` 4,66,22,428 1,44,94,324 6,08,00,000 1,48,68,992 1,96,56,823 8,24,72,280 5,14,86,990 1,25,00,000 4,00,45,143 3,04,47,286 11,29,18,623 39,80,00,000 Cumulative expenditure up to the reporting Overhead Programs Project in ( ` ) 9,54,084 9,08,124 Direct 26,10,155 50,59,392 72,88,706 1,44,94,324 3,04,00,000 1,47,06,823 8,24,72,280 1,34,82,845 1,25,00,000 2,71,57,829 Expenditure 11,29,18,623 39,80,00,000 Amount Spent on Program or 1,85,00,000 5,35,23,051 1,45,00,000 6,08,00,000 1,02,50,000 1,63,63,004 3,95,36,359 8,53,80,507 5,00,00,000 4,84,58,214 4,44,67,486 wise in ( ` ) or program 17,21,53,373 14,99,91,000 39,80,00,000 Amount Outlay (Budget) project or program was undertaken State & District where project Across India Across India Across India Dist. Ahmednagar, Aurangabad, Beed, Gondia, Hingoli, Jalgaon, Kolhapur, Jalna, Latur, Nanded, Nandurbar, Nashik, Osmanabad, Parbhani, Ratnagiri, Satara, Solapur and Washim, Maharashtra Dist. Ernakulam, Kerala Dist. Ahmedabad, Gujarat Dist. Thane, Maharashtra Dist. Dhubri, Unakoti, Araria and Papum Pare, Assam, Tripura, Bihar & Arunachal Pradesh Dist. Mumbai, Bangalore, Chennai, Vellore, Delhi and Ahmedabad, Maharashtra, Tamil Nadu, Karnataka, Delhi & Gujarat Dist. Ernakulam, Kerala Dist. Sindhudurg, Maharashtra Dist. Raigad, Maharashtra Across India Dist. Chennai, Balangir, Tamil Nadu & Odisha other Local area or Local Local Local Local Local Local Local Other Local Local Other Local Other Local project is covered 5(c) Details of the manner in which amount was spent Sector in which the Category (i) Eradicating hunger, poverty and malnutrition, promoting healthcare including preventive healthcare and sanitation and making available safe drinking water CSR project or activity identified Supporting Congenital Heart Defect surgeries for underprivileged children Immediate relief measures during COVID-19 pandemic (2019- 20) Swachhta Activities (2018-19) Swachhta Activities (2019-20) Marine Ambulance for emergency services Construction of toilet blocks in Gujarat Jails Construction of community sanitation units, Thane Reducing avoidable disability through medical services on the Lifeline Express-hospital on a train at 4 locations Support for cancer care and cure Swachh Iconic Project Kalady Providing infrastructure and allied facilities for School of Nursing Open Defecation Free & Clean Panvel Contribution towards LPG connections for BPL households Support for construction of individual household toilet units at Tiruvottiyur and Balangir Sr. No. Flagship Projects/Major Projects/Special Projects 1 4 2 3 5 6 8 9 10 11 12 13 14 7
94 Bharat Petroleum Corporation Limited Agency-Name or Implementing Amount spent: Direct spent: Amount Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) Sri Sathya Sai Health & Education Trust Swami Vivekanand Health Mission Society (SVHMS) Tata Education and Development Trust (TEDT) Servants of the People Society Water, Sanitation and Hygiene Institute (WASH Institute) Wockhardt Foundation Society for Education, Society for Action and Research in Community Health (SEARCH) Prayagraj Mela Pradhikaran Central Institute of Plastics Engineering & Technologies (CIPET) Directorate of Employment and Training, Chennai District Administration, Darrang Centre for Research & Industrial Staff Performance (CRISP) 49,57,250 45,57,100 period ` 4,15,96,841 1,96,12,576 3,63,00,000 1,30,32,720 1,50,41,894 4,00,00,000 1,88,64,000 2,41,81,120 2,70,86,200 14,15,79,061 Cumulative expenditure up 1,00,00,00,000 to the reporting Overhead Programs Project in ( ` ) 9,40,118 Direct 49,57,250 45,57,100 4,15,96,841 1,37,28,804 3,63,00,000 9,73,35,604 1,01,36,560 4,00,00,000 1,03,10,400 2,41,81,120 2,70,86,200 Expenditure Amount Spent on Program or 1,00,00,00,000 4,97,29,213 1,96,12,576 6,60,00,000 1,98,29,000 1,44,80,800 1,56,68,640 4,00,00,000 4,55,71,000 1,90,08,000 4,83,62,240 wise in ( ` ) or program 29,30,93,011 13,54,31,000 1,25,00,00,000 Amount Outlay (Budget) project or program was undertaken State & District where project Dist. Raigad, Maharashtra Dist. Dehradun, Uttarakhand Across India Dist. Cuttack, Odisha Dist.Gadchiroli, Maharashtra Dist. Darrang, Assam Dist. Thane, Nashik, Dhule and Jalgaon, Maharashtra Dist. Dindigul, Tamil Nadu Dist. Prayagraj, Uttar Pradesh Dist. Damoh, Chhatarpur, Rajgarh, Singrauli, Barwani, Guna, Vidisha and Khandwa, Madhya Pradesh Across India Dist. Darrang, Assam Dist. Nagapattinam, Tamil Nadu other Local area or Local Other Other Other Other Other Local Other Local Other Local Other Other project is covered Sector in which the Category (i) Eradicating hunger, poverty and malnutrition, promoting healthcare including preventive healthcare and sanitation and making available safe drinking water Category (i) Eradicating hunger, poverty and malnutrition, promoting healthcare including preventive healthcare and sanitation and making available safe drinking water Categories (i) healthcare and (ii) education Category (ii) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects CSR project or activity identified Contribution to the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (COVID-19) Providing medical equipment for quality paediatric cardiac services Primary healthcare & diagnostic services to tribal villages through Mobile Medical Unit and equipment Development of affordable cancer care for the population Support for procurement of MRI machine & CT Scan Support for construction of dormitory facilities and renovation of a pond Primary healthcare through the operation of a Mobile Medical Unit Support of welfare Sanitation workers engaged in Kumbh Mela Construction of individual toilets & awareness generation activities, Dindigul Placement linked skill development for underprivileged / unemployed youth Skill Development for underprivileged youth from Aspirational Districts Construction of additional classrooms with allied facilities in Govt. Primary Schools Establishing a new Govt.Industrial Training Institute (ITI) at Sembodai Sr. No. 15 16 17 18 19 20 22 23 21 24 25 27 26
Annual Report 2019-20 95 Agency-Name or Implementing Amount spent: Direct spent: Amount Manav Vikas Sanstha Pratham Education Foundation Pratham Education Foundation Pratham Infotech Foundation Indian Institute of Science Bangalore Ekalavya Foundation Ramakrishna Mission Students Home Ramakrishna Mission Vidyalaya, Coimbatore Ramakrishna Mission, Belur Math Skill Development Institute (SDI) Bhubaneswar Skill Development Institutes at six locations Shree Bhuleshwar Shikshan Prasarak Mandal The Leprosy Mission Trust India Tripunithura Municipality Tripunithura Municipality Vivekananda Rock Memorial and Vivekananda Kendra Sri Ramakrishna Math, Chennai 37,35,468 37,60,000 period ` 3,49,20,480 3,07,89,125 2,08,59,312 1,55,01,568 3,65,07,201 1,69,42,021 4,29,99,000 1,12,85,045 1,75,00,000 2,76,06,571 2,86,38,284 17,89,32,657 14,99,81,877 30,00,00,000 10,00,00,000 Cumulative expenditure up to the reporting 1,40,920 Overhead Programs Project in ( ` ) Direct 23,84,448 37,35,468 37,60,000 36,47,522 86,27,053 65,14,200 1,36,56,617 1,23,75,067 9,04,23,400 1,16,26,176 9,64,39,017 2,50,98,701 1,69,42,021 4,29,99,000 4,50,00,000 1,75,00,000 Expenditure 18,50,00,000 Amount Spent on Program or 2,33,46,485 1,93,76,960 4,56,34,002 1,97,70,658 9,55,53,335 1,49,41,872 1,88,00,000 1,12,85,045 3,50,00,000 3,45,08,214 3,60,36,000 wise in ( ` ) or program 11,60,99,153 10,04,81,094 15,03,28,070 19,81,89,047 30,00,00,000 16,50,00,000 Amount Outlay (Budget) project
or program was undertaken State & District where project Dist. Sagar, Madhya Pradesh Dist. Nandurbar, Maharashtra Dist.Mumbai, Maharashtra Dist. Chennai, Tamil Nadu Dist. Shrawasti and Mewat, Uttar Pradesh & Haryana Dist. Bangalore, Karnataka Dist.Vikarabad, Telangana Dist. Coimbatore, Tamil Nadu Dist. Kolkata, West Bengal Dist. Pune, Maharashtra Dist. Chennai, Tamil Nadu Dist. Khordha, Odisha Dist. Khordha, Kochi, Raebareli, Kamrup, Ahmedabad, Visakhapatnam- Odisha, Kerala, Uttar Pradesh, Assam, Gujarat & Andhra Pradesh Dist. Ernakulam, Kerala Dist. Ernakulam, Kerala Dist. Khordha, Odisha Across India other Local area or Other Other Local Local Other Local Other Local Local Local Local Local Local Local Local Local Local project is covered Sector in which the Category (ii) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects Category (ii) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects CSR project or activity identified Supporting infrastructure facilities for training in organic farming and sustainable livelihoods Project Akshar, Sagar Project Akshar, Nandurbar Computer Assisted Learning (CAL) project with BMC schools Construction of Skill Development Center Placement linked skill development training programme in Aspirational Districts Construction of hostel for Women Upgradation of facilities for technical education in RKM campus Coimbatore Support for construction of Centre Human Excellence and Social Sciences Support for construction of high school building Enhancing school infrastructure of Girls' Higher Secondary School Contribution towards Skill Development Institute, Bhubaneswar for construction / expansion of the main campus Contribution towards Skill Development Institutes at six locations for operational expenses Enhancement of facilities at Anganwadis nos.39/70/62/94/81 Supporting Centre of Excellence Project for girls at Higher Secondary School, Tripunithura Support for construction of Vivekananda Kendra Academy Scaling up support for placement linked vocational training centre for Leprosy affected and underprivileged youth Sr. No. 28 31 32 33 34 30 29 35 36 37 40 39 38 42 43 44 41
96 Bharat Petroleum Corporation Limited Agency-Name or Implementing Amount spent: Direct spent: Amount Confederation of Indian Industry Foundation (CII) Odisha State Disaster Management Authority Vadavucode Puthencruz Grama Panchayat Various implementing agencies including local government Various implementing agencies including local government Various implementing agencies Various implementing agencies including local government, Govt. bodies and Direct implementation projects Directly implemented 54,52,900 period ` 5,00,00,000 3,05,10,000 11,27,48,262 35,37,35,652 10,28,18,043 17,40,59,208 28,98,52,384 Cumulative expenditure up Sd/ to the reporting H. P. Shah 26,495 2,53,223 88,38,826 92,59,464 Overhead Programs Chairman – CSR Committee Project in ( ` ) Direct 54,52,900 5,00,00,000 3,05,10,000 7,64,86,809 7,63,95,285 Expenditure 25,44,33,926 23,24,89,029 10,08,24,879 Amount Spent on Program or 3,44,64,04,700 3,45,56,64,164 1,24,86,073 5,00,00,000 4,75,00,000 wise in ( ` ) or program 45,05,92,305 23,03,36,716 26,04,85,065 40,29,41,577 18,58,74,343 Amount Outlay (Budget) project Sd/ or program was undertaken State & District where project N. Vijayagopal Dist. Ludhiana and Barnala, Punjab Dist. Khordha, Odisha Dist. Ernakulam, Kerala Multiple districts of Kerala Multiple districts of Maharashtra Across India Across India Across India Across India Across India Director (Finance) other Local area or Local Local Local Local/ Other Local/ Other Local/ Other Local/ Other Local/ Other Local Local project is covered Sector in which the Category (x) Rural development Projects Categories (i) (ii) and (x) of Schedule VII of the Companies Act Categories (i) (ii) (iv) and (x) of Schedule VII of the Companies Act Categories (i) (ii) (iv) (v) and (x) of Schedule VII of the Companies Act Categories (i) (ii) (iv) and (x) of Schedule VII of the Companies Act Categories (i) (ii) and (x) of Schedule VII of the Companies Act Admin Expenses Capacity building expenses Total CSR Expenditure (2019-20) Sd/ Director (HR) K. Padmakar CSR project or activity identified Crop residue management initiative Contribution towards Relief & Rehabilitation activities post Cyclone Fani Construction of rural road and drainage facilities for enhancing quality of life backward communities CSR projects by Kochi Refinery CSR projects by Mumbai Refinery CSR projects by Corporate Office CSR projects across India by Regional Offices CSR projects across India Travel/Miscellaneous/Admin Expenses Volunteering & Other Capacity Building Expenses Sr. No. 45 46 47 48 49 50 51 52 53 54
Annual Report 2019-20 97 0 ------19 EWS 2 2 ------18 OBCs 2 2 ------17 STs 0 ------By Other Methods 16 SCs -- -- 11 *10 15 ***1 Total 1 5 6 -- -- 14 STs 2 7 -- 14 23 13 SCs By Promotion -- 45 103 166 12 **18 Total 3 1 4 -- -- 11 EWS 9 -- 39 73 121 10 OBCs Number of appointments made during the calendar year 2019 1 2 1 4 -- 9 STs 4 ANNEXURE C -- 21 14 39 8 SCs By Direct Recruitment -- 31 165 130 326 7 Total 3 0 0 1 4
6 EWS JANUARY, 2020 AND NUMBER OF APPOINTMENTS MADE DURING THE PRECEDING CALENDAR YEAR, 2019 ST 272 443 261 5 1132 2108 OBCs 396 106 109 107 718 4 STs 988 315 273 243 3 1819 SCs (As on 1.1.2020) 6000 2220 1796 1370 11386 2 Representation of SCs/STs/OBCs/EWS Total number of Employees 1 Group ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCHEDULED CASTES (SC), TRIBES (ST), OTHER BACKWARD CLASSES (OBC) AND ECONOMICALLY WEAKER SECTIONS (EWS) AS ON 1 Name of the Public Sector Enterprise: BHARAT PETROLEUM CORPORATION LTD. Group-A Group-B Group-C Group-D/Ds Total ANNEXURE TO THE DIRECTORS’ REPORT * 8 Sportspersons recruited in Group ‘A’ **2 Sportspersons promoted to Group ‘A’ ***1 Sportsperson recruited in Group ‘ B’ Reservation of vacancies for Economically Weaker Sections (EWS) notified on or after 01.02.2019. 3 EWS recruited in Group ‘A’ 1 EWS recruited in Group ‘D’ Group-D/Ds-Group is merged
98 Bharat Petroleum Corporation Limited ------0 20 EWS ------2 2 19 OBCs ------2 2 18 STs ------0 By Other Methods 17 SCs ------*9 *1 10 16 Total ------1 1 15 STs ------2 2 14 SCs ------By Promotion 18 13 **18 Total ------3 3 12 EWS ------5 5 3 JANUARY, 2020 AND NUMBER OF APPOINTMENTS MADE IN THE 26 39 ST 11 OBCs ------1 1 Number of Appointments made during the calendar year 2019 10 STs ------1 6 1 13 21 9 SCs By Direct Recruitment ------3 72 37 43 10 8 165 Total ------3 3 7
EWS - - - - 4 82 19 6 265 411 206 145 1132 OBCs - - - - 4 75 67 75 59 13 5 103 396 STs SERVICE IN VARIOUS GRADES DURING THE CALENDAR YEAR 2019 - 3 1 1 58 20 4 162 239 174 185 145 988 SCs 4 1 (as on 01.01.2020) 59 21 916 984 683 391 163 1683 1095 6000 3 Representation of SCs/STs/OBCs/EWS Employees Total Number of 2 (in ` ) Pay Scales 60000-180000 70000-200000 80000-220000 90000-240000 100000-260000 120000-280000 120000-280000 120000-280000 150000-300000 180000-340000 200000-370000 TOTAL I F J 1 E B A C ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCHEDULED CASTES (SC), TRIBES (ST), OTHER BACKWARD CLASSES (OBC) AND K D H G JG ECONOMICALLY WEAKER SECTIONS (EWS) IN VARIOUS GROUP “A” SERVICES AS ON 1 NAME OF PSU : BHARAT PETROLEUM CORPORATION LTD. * 8 Sportspersons recruited in 2019 **2 Sportspersons promoted to Group ‘A’ in 2019
Annual Report 2019-20 99 0 ------11 LD 3 1 2 6 -- 10 OH 9 1 1 ------HH JANUARY, 2020 AND NUMBER OF ST *NO. OF APPOINTMENTS (2019) 8 1 1 2 -- -- VH 7 0 ------LD
6 92 46 16 21 OH 175 5 4 5 10 12 31 HH (as on 01.01.2020) 4 7 9 2 14 32 VH NUMBER OF PWD EMPLOYEES 3 57 37 28 116 238 TOTAL
2 6000 2220 1796 1370 11386 TOTAL APPOINTMENTS OF PWDs (RECRUITMENT / PROMOTION) DURING THE CALENDAR YEAR 2019 (as on 01.01.2020) T otal number of E mployees 1 ANNUAL STATEMENT SHOWING REPRESENTATION OF THE PERSONS WITH DISABILITIES (PWDs) IN SERVICE AS ON 1 "A" GROUP "B" "C" "D/DS" TOTAL * No. of Appointments include (Recruitment & Promotion) VH stands for Visually Handicapped (persons suffering from blindness or low vision) HH stands for Hearing Handicapped (persons suffering from hearing impairment- (deaf or hard of hearing) victims, acid attack palsy, disability, cerebral locomotor suffering from Disability (including persons Locomotor Handicapped / Orthopaedically for LD stands or OH dwarfism, muscular dystrophy and leprosy cured) LD or ID stands for Learning Disability / Intellectual (persons with autism, intellectual disability, specific learning disability and mental illness)
100 Bharat Petroleum Corporation Limited ANNEXURE TO THE DIRECTORS' REPORT
ANNEXURE D REPORT ON CORPORATE GOVERNANCE 1) Company’s philosophy on Code of Governance Bharat Petroleum Corporation Limited’s (“the Company/ BPCL”) corporate philosophy on Corporate Governance has been to ensure fairness to the Stakeholders through transparency, full disclosures, empowerment of employees and collective decision making. 2) Board of Directors As per the Articles of Association of the Company, the number of Directors shall not be less than three and not more than sixteen. As on 31st March 2020, the BPCL Board comprised 9 Directors represented by 5 Whole-time (Executive) Directors including Chairman & Managing Director, 2 Part-time (Ex-Officio) Directors (Government Directors) and 2 Part-time (Non-official) Directors (Independent Directors). Smt. J. M. Shanti Sundharam, Independent Director ceased to be the director of company w.e.f. 5th March, 2020 on her resignation due to personal reasons. She has confirmed that there are no other material reasons for her resignation. BPCL has taken up the matter with the Government of India for nomination of 6 additional Independent Directors with at least one woman Independent Director, to fulfill the requirements under Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and Section 149 of the Companies Act, 2013. During the Financial Year 2019-20, all meetings of the Board and the Annual General Meeting were chaired by the Chairman & Managing Director. The Directors neither held membership of more than 10 Committees nor acted as Chairperson of more than 5 Committees as specified in Regulation 26 of the Listing Regulations and Clause 3.3.2 of Guidelines on Corporate Governance for Central Public Sector Enterprises issued by Department of Public Enterprises across all the companies in which they were Directors. The required information as indicated in Part A of Schedule II of Regulation 17(7) of the Listing Regulations and Annexure IV to Guidelines on Corporate Governance for Central Public Sector Enterprises were made available to the Board of Directors. Matrix setting out the skills/ expertise/ competence of Board of Directors BPCL being a Government Company, all the Directors are appointed as per the nominations from the Government of India. The Company has a competent Board with background and knowledge of the Company’s Businesses. All the Directors have requisite skills, expertise, competence in the areas of leadership, risk management, strategic planning, analytical thinking, corporate governance, finance, cost control measures and general administration. The Board comprises Directors from diverse experience, qualifications, skills, expertise etc. which are aligned with the Company’s business, overall strategy, corporate ethics, values and culture etc. Details regarding the Board Meetings, Annual General Meeting, Directors’ attendance thereat, Directorships and Committee positions held by the Directors are as under :- Board Meetings Sixteen Board Meetings were held during the Financial Year 2019-20 on the following dates:-
26th April, 2019 20th May, 2019 3rd June, 2019 14th June, 2019 15th July, 2019 9th August, 2019 13th September, 2019 26th September, 2019 15th October, 2019 31st October, 2019 7th November, 2019 30th December, 2019 8th January, 2020 13th February, 2020 12th March, 2020 30th March, 2020
Annual Report 2019-20 101 June, 2019) rd Regulations, 2015 as specified under Regulation and Disclosure Requirements) 26 of SEBI (Listing Obligations - Stakeholders’ Relationship Committee: Member - Bharat Petroleum Corporation Ltd. Bharat Petroleum Corporation Ltd. - - Stakeholders’ Relationship Committee: Member (w.e.f. 3 Memberships held in Committees March, 2020) st Companies (as on 31 Details of Directorships held in other Bharat Oman Refineries Ltd. Bharat PetroResources Ltd. Bharat Gas Resources Ltd. Bharat Gas Resources Ltd. Numaligarh Refinery Ltd. Bharat Oman Refineries Ltd. Bharat PetroResources Ltd. Petronet LNG Ltd.(Listed Entity-Nominee Director of BPCL) Bharat Gas Resources Ltd. Petronet India Ltd. Bharat Oman Refineries Ltd. Ratnagiri Refinery and Petrochemicals Ltd. Bharat Gas Resources Ltd. Director: 1. 2. 2. Director: 1. Chairman: 1. 2. Director: 1. 2. 3. Chairman: 1. Director: 1. 2. 3. - Annual General Meeting Attended Attended Attended Attended Attended at the last Attendance % 100 100 100 100 93.75 16 16 16 16 15 Attended percentage thereof during the year and Board Meetings held Attendance out of 16 No. of Meetings A.C.A., L.L.B. Mechanical Engineering with first rank from NIT, Patna (Formerly BCE, Patna) B.Tech (IIT, Madras); PGDM from IIM, Bangalore B. Tech (Chem) Master’s Degree in Personnel Management, Bachelor’s Degree in Agriculture Academic Qualifications Names of the Directors Shri N.Vijayagopal Director (Finance) Shri A.K.Singh Director (Marketing) Whole-time Directors Shri D. Rajkumar Chairman & Managing Director Shri R. Ramachandran Director (Refineries) Shri K. Padmakar Director (Human Resources) Particulars of Directors including their attendance at the Board/ Members’ Meetings during Financial Year 2019-20
102 Bharat Petroleum Corporation Limited March, 2020) Bharat Petroleum th Requirements) Regulations, 2015 (Listing Obligations and Disclosure Memberships held in Committees as Audit Committee: Member (w.e.f. 12 - - Corporation Ltd. specified under Regulation 26 of SEBI March, 2020) st Companies (as on 31 Oil and Natural Gas Corporation Ltd. (Listed Entity-Nominee Director of Govt. India) Indian Strategic Petroleum Reserves Ltd. Bharat Yantra Nigam Ltd. Oil and Natural Gas Corporation Ltd. (Listed Entity-Nominee Director of Govt. of India) Indian Strategic Petroleum Reserves Ltd. Malabar Cements Ltd. The Kerala Minerals and Metals Ltd. Nitta Gelatin India Ltd. Kerala State Industrial Development Corporation Ltd. INKEL Ltd. Kottayam Port and Container Terminal Services Private Limited Overseas Keralites Investment and Holding Ltd. Norka-Roots (Sect 25 Company) Details of Directorships held in other Director: 1. 2. Director: 1. 2. 3. Chairman: 1. 2. 3. Director: 1. 2. 3. 4. 5. Not Not #NA Annual General Meeting Attended Attended at the last Attendance % 100* 81.25 83.33* 4 13 10 Attended percentage thereof during the year and Board Meetings held Attendance out of 16 No. of Meetings I.A.S., B.Tech (Civil) IIT (Delhi), Diploma in Finance ICFAI (Hyderabad), Executive Masters in International Business from IIFT (Delhi) I.A.S., PhD from IIT Madras and MS from Bangalore Medical College I.A.S., B. Tech (Computer Science & Engineering) from IIT (Delhi) Academic Qualifications January 2020) January 2020) th th Names of the Directors Shri Rajesh Aggarwal Additional Secretary and Financial Advisor, MOP&NG (w.e.f. 8 Dr. K. Ellangovan Principal Secretary, Industries Department, Government of Kerala Non Executive Directors a) Part-time (Ex officio) Shri Rajiv Bansal Additional Secretary and Financial Advisor, MOP&NG (up to 7 Particulars of Directors including their attendance at the Board/ Members’ Meetings during Financial Year 2019-20 N.A. # : Not applicable * Percentage computed by considering the meetings attended with total held during Director’s tenure.
Annual Report 2019-20 103
February, 2020) December, February, 2020) th th th December, 2019) th
Requirements) Regulations, 2015 (Listing Obligations and Disclosure Memberships held in Committees as Audit Committee : Member - Bharat Petroleum Corporation Ltd. Audit Committee: Member (Chairman w.e.f. 30 (Chairman w.e.f. 11 Audit Committee : Chairman - Bharat Petroleum Corporation Ltd. Audit Committee : Member - Bharat Petroleum Corporation Ltd. Stakeholders’ Relationship Committee : Chairman - Bharat Petroleum Corporation Ltd. 2019) Bharat Petroleum Corporation Ltd. Audit Committee : Member - (w.e.f. 11 Bharat Petroleum Corporation Ltd. Bharat Petroleum Corporation Ltd. Stakeholders’ Relationship Committee: Member (w.e.f. 30 specified under Regulation 26 of SEBI March, 2020) st Companies (as on 31 Free Press House Ltd. Rishi Corporate Services Private Ltd. Details of Directorships held in other - - Director: 1. Director: 1. - Annual General Meeting Attended Attended Attended Attended Attended at the last Attendance % 75 100* 100* 85.71* 90.90* 12 12 13 11 10 Attended percentage thereof during the year and Board Meetings held Attendance out of 16 No. of Meetings I.A.S., M.A. (Economics) University of Delhi M.A. (English Literature), M.Phil. (Public Administration), I.R.S. (Indian Customs and Central Excise Services) B.Sc.(Physics) EPBM from IIM (Calcutta) F.C.A. B.Sc. (Maths) Academic Qualifications July 2019) November 2019) th March 2020) February 2020) th th th our-policies.aspx Details of familiarization programmes imparted to Independent Directors are available on website of the Company: https://www.bharatpetroleum.com/about-bpcl/ on website of imparted to Independent available familiarization programmes Directors are of Details Shri V. S. Oberoi Names of the Directors Shri Rajesh Kumar Mangal (up to 30 Shri Vishal V Sharma (up to 8 Smt. J. M. Shanti Sundharam (up to 4 Shri H. P. Shah (w.e.f. 16 Non Executive Directors (b) Part-time (Independent) Particulars of Directors including their attendance at the Board/ Members’ Meetings during Financial Year 2019-20 Note: * Percentage computed by considering the meetings attended with total held during Director’s tenure.
104 Bharat Petroleum Corporation Limited The Board has reviewed the compliance of all laws applicable to the Company. The Board has adopted a Code of Conduct for the Directors and also for the Senior Management of the Company and the same has been posted on the website of the Company. There is a system in the organization of affirming compliance with Corporate Governance by the Board Members and Senior Management Personnel of the Company. A declaration of compliance is enclosed with this Annual Report. None of the Non-Executive Directors of BPCL has any pecuniary relationship / transaction with the Company during the Financial Year. The declaration has been received from the Independent Directors about meeting the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the Listing Regulations. In the opinion of the Board, the Independent Directors fulfill the conditions of independence specified in the said Act and Regulations and are independent of the management. 3) Board Committees A) Audit Committee BPCL’s Audit Committee comprises three Part-time Directors. The role, powers and functions of the Audit Committee were specified and approved by the Board. The quorum for the meetings of the Committee is two members with the presence of at least two Independent Directors. The members possess the requisite knowledge of Finance & Accounting for effective functioning of the Audit Committee. The Company Secretary acts as the Secretary to the Audit Committee. The Head of Internal Audit is actively involved with the meetings of the Audit Committee besides attending and participating at the said meetings. In addition, Whole-time Directors also attend the meetings. The Statutory Auditors and Cost Auditors are invited to attend and participate at the meetings for relevant Audit Committee Agenda. On cessation of the tenure of Shri Rajesh Kumar Mangal, Chairman of the Committe w.e.f. 1st December, 2019, Shri V. S. Oberoi, Independent Director, was appointed as Chairman of the Committee w.e.f. 30th December, 2019. Further, Shri H.P. Shah, Independent Director, was inducted as a Member of the Committee w.e.f. 11th February, 2020. Shri Vishal V Sharma, Independent Director, ceased to be a Member of the Committee w.e.f. 9th February, 2020. Smt. J.M. Shanti Sundharam, Independent Director ceased to be a Member of the Committee w.e.f. 5th March, 2020. Shri Rajesh Aggarwal, Government Director, was inducted as a Member of the Committee w.e.f. 12th March, 2020. As on 31st March, 2020, the Audit Committee comprised Shri V.S. Oberoi, Independent Director, as the Chairman of the Committee and Shri H.P. Shah, Independent Director and Shri Rajesh Aggarwal, Government Director, both as the Members of the Committee. Shri V.S. Oberoi, Chairman ceased to be a Member w.e.f. 10th April, 2020. Accordingly, on receipt of nomination from the Govt. of India, the Committee will be reconstituted after inducting requisite number of Independent Directors as Members. The role of the Audit Committee covers all matters specified in Regulation 18 read with Part C of Schedule II of the Listing Regulations, Section 177 of the Companies Act, 2013 and Guidelines on Corporate Governance for Central Public Sector Enterprises. The role and responsibilities of the Audit Committee include the following: 1) Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible; 2) Recommending to the Board the fixation of audit fees; 3) Approval of payment to Statutory Auditors for any other services rendered by them;
Annual Report 2019-20 105 4) Reviewing, with the Management, the Annual Financial Statements and Auditor’s Report thereon before submission to the Board for approval, with particular reference to: a) Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s Report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013. b) Changes, if any, in accounting policies and practices and reasons for the same. c) Major accounting entries involving estimates based on the exercise of judgment by Management. d) Significant adjustments made in the financial statements arising out of audit findings. e) Compliance with listing and other legal requirements relating to financial statements. f) Disclosure of any related party transactions. g) Qualifications in the draft audit report; 5) Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval; 6) Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document /prospectus /notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; 7) Reviewing and monitoring the Auditor’s independence and performance, and effectiveness of the audit process; 8) Approval or any subsequent modification of transactions of the Company with related parties; 9) Scrutinizing inter-corporate loans and investments; 10) Valuation of undertakings or assets of the Company, wherever it is necessary; 11) Evaluating internal financial controls and risk management systems; 12) Reviewing, with the Management, performance of the Statutory and Internal Auditors and adequacy of the internal control systems; 13) Reviewing the adequacy of the Internal Audit function, if any, including the structure of the Internal Audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; 14) Discussing with the Internal Auditors any significant findings and follow up thereon; 15) Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board; 16) Discussing with the Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; 17) Looking into the reasons for substantial defaults in the payment to the Depositors, Debenture Holders, Shareholders (in case of non-payment of declared dividends) and Creditors; 18) Reviewing the functioning of the Whistle Blower Mechanism; 19) Reviewing the follow up action on the audit observations of the C&AG Audit; 20) Reviewing the follow up action on the recommendations of the Committee on Public Undertakings (COPU) of Parliament; 21) Provide an open avenue of communication between the Independent Auditor, Internal Auditor and the Board of Directors;
106 Bharat Petroleum Corporation Limited 22) Approval of appointment of CFO (i.e. the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate; 23) Carrying out any other function as mentioned in the ‘Terms of reference’ to the Audit Committee; 24) Reviewing the utilization of loans and/ or advances from/investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower, including existing loans / advances / investments existing as on the date of coming into force of this provision. Review of information by the Audit Committee: The Audit Committee shall mandatorily review the following information: 1) Management discussion and analysis of financial condition and results of operations; 2) Statement of significant related party transactions (as defined by the Audit Committee), submitted by management; 3) Management letters / letters of internal control weaknesses issued by the Statutory Auditors; 4) Internal audit reports relating to internal control weaknesses; 5) The appointment, removal and terms of remuneration of the Chief Internal Auditor; 6) Statement of deviations as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to Stock Exchange(s) in terms of Regulation 32(1). b) Annual statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice in terms of Regulation 32(7); 7) The financial statements, in particular, the investments made by the unlisted subsidiary company; 8) Certification/declaration of financial statements by the Chief Executive Officer and Chief Finance Officer. Eight meetings of the Audit Committee were held during the Financial Year 2019-20 on the following dates:
26th April, 2019 20th May, 2019 15th July, 2019 9th August, 2019 13th September, 2019 15th October, 2019 7th November, 2019 13th February, 2020 Attendance at the Audit Committee Meetings
Names of the Members No of meetings attended % Shri Rajesh Kumar Mangal, Chairman (up to 30th November, 2019) 7 100* Shri V.S. Oberoi, Member (Chairman w.e.f. 30th December, 2019) 7 87.5 Shri Vishal V Sharma, Member (up to 8th February, 2020) 7 100* Smt. J.M. Shanti Sundharam, Member (up to 4th March, 2020) 6 75* Shri H.P. Shah, Member (w.e.f. 11th February, 2020) 1 100* *Percentage computed by considering the meetings attended with the total meetings held during the Director’s tenure. The Committee at its meetings held on 9th August, 2019, 7th November, 2019, 13th February, 2020 reviewed the Quarterly, Half Yearly, Year to date Financial Statements as on 30th June, 2019, 30th September, 2019 and 31st December, 2019 respectively.
Annual Report 2019-20 107 All the Subsidiary Companies of the Company are managed by their respective Boards and the Management. The Financial Statements of the Subsidiary Companies including investments made, if any, are reviewed by their respective Audit Committee / Board. The performance of Subsidiary Companies and the minutes of their Board meetings are placed at the Board meetings of the Company. Any significant transaction or arrangement entered into by the Subsidiary Companies are also reported to the Board of Directors of the Company. B) Project Evaluation Committee The Project Evaluation Committee (PEC) comprising two Independent Directors, one Government Director and Director (Finance) evaluates and recommends projects costing over ` 500 Crore for Board approval. Shri H.P. Shah, Independent Director was appointed as Member of the Committee w.e.f. 12th March 2020. Smt. J.M. Shanti Sundharam, Independent Director, ceased to be a Member of the Committee with effect from 5th March 2020. As on 31st March, 2020, the Project Evaluation Committee comprised of Shri V.S. Oberoi, Independent Director as the Chairman of the Committee and Shri N. Vijayagopal, Director (Finance), Dr. K. Ellangovan, Government Director and Shri H.P. Shah, Independent Director as Members. Shri V.S. Oberoi, Independent Director ceased to be a Chairman w.e.f. 10th April 2020. Shri H.P. Shah, Member was appointed as Chairman of the Committee w.e.f. 10th July 2020. The PEC will evaluate, guide implementation, monitor, review and assess deliverables, provide recommendations and advice to the Board for projects costing over ` 500 Crore including investments in Subsidiaries / Joint Ventures. Three meetings of the PEC were held during the Financial Year 2019-20 on the following dates: 26th April, 2019 13th September, 2019 30th December, 2019 Attendance at the Project Evaluation Committee Meetings Names of the Members No. of meetings attended % Shri V.S. Oberoi, Chairman 3 100 Dr. K. Ellangovan, Member 3 100 Smt. J.M. Shanti Sundharam, Member (up to 4th March, 2020) 2 66.67 Shri N. Vijayagopal, Member 3 100 C) Nomination and Remuneration Committee The Nomination and Remuneration Committee formulates and reviews policies related to remuneration / perquisites / incentives within the parameters of Guidelines issued by the Government of India. BPCL being a Government Company, appointment/nomination of all the Directors is made by the President of India through the Ministry of Petroleum & Natural Gas including fixation of remuneration of the Whole-time Directors and employees. During the Financial Year 2019-20, Shri Rajesh Kumar Mangal ceased to be Member w.e.f. 1st December, 2019. Shri Rajesh Aggarwal, Government Director was appointed as a Member of the Committee w.e.f. 8th January, 2020 in place of Shri Rajiv Bansal, Government Director who ceased to be a Member w.e.f. 8th January, 2020. Further, Smt. J.M. Shanti Sundharam, Independent Director ceased to be a Member of the Committee w.e.f. 5th March, 2020. Shri H.P. Shah, Independent Director was appointed as a Member of the Committee w.e.f. 12th March, 2020. As on 31st March, 2020, the Nomination and Remuneration Committee comprised Shri V.S. Oberoi, Independent Director as Chairman, Shri H.P. Shah, Independent Director and Shri Rajesh Aggarwal, Government Director as Members and Shri K. Padmakar, Director (Human Resources) and Shri N. Vijayagopal, Director (Finance) being invitees. During the Financial Year 2019-20, one meeting of the Committee was held on 13th February, 2020, which was attended by Shri V.S. Oberoi, Chairman, Shri Rajesh Aggarwal, Member and Smt. J.M. Shanti Sundharam, Member. Subsequently, Shri V.S. Oberoi ceased to be Member w.e.f. 10th April, 2020. Accordingly, after receipt
108 Bharat Petroleum Corporation Limited of nomination from Govt. of India, Nomination and Remuneration Committee will be reconstituted after inducting the requisite number of Independent Directors as Members. BPCL is a Government Company and as per the MCA circular, exemptions have been given to Government Companies from applicability of Section 178 (2), (3), (4) of the Companies Act, 2013. D) Stakeholders’ Relationship Committee The role of the Stakeholders’ Relationship Committee is to specifically look into the redressal of grievances of shareholders, debenture holders (and other security holders) including complaints related to transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc. and other additional roles as covered under the Listing Regulations. During the Financial Year 2019-20, Shri H.P. Shah, Independent Director was inducted as a Member of the Committee w.e.f. 30th December, 2019. Shri Vishal V Sharma, Independent Director ceased to be a Chairman of the Committee w.e.f. 9th February, 2020. Shri H.P. Shah, Independent Director was appointed as the Chairman of the Committee with effect from 11th February, 2020. As on 31st March, 2020, the Stakeholders’ Relationship Committee comprised of Shri H.P. Shah, Independent Director as Chairman, Shri N. Vijayagopal, Director (Finance) and Shri K. Padmakar, Director (Human Resources) as its Members. The Committee, at its meeting held on 12th March, 2020, reviewed the services rendered to the Shareholders / Investors including response to complaints / communications and expressed its satisfaction on the performance of the Investor Relations Department of the Company. The said meeting was attended by all the Members of the Committee. The Company Secretary acts as the Compliance Officer for matters related to investor relations. Shri M. Venugopal, Company Secretary acted as the Compliance Officer up to 31st December, 2019 and thereafter, Smt. V. Kala is acting as the Compliance Officer w.e.f. 13th February, 2020. During the Financial Year 2019-20, five complaints were received from investors through SEBI, BSE and NSE, which were attended to and resolved on priority basis. E) Corporate Social Responsibility Committee The terms of reference of the Corporate Social Responsibility (CSR) Committee broadly comprise: 1. In every Financial Year, utilizing at least 2% of average net profits of the Company made during the three immediately preceding financial years towards CSR activities as specified in Schedule VII of the Companies Act, 2013; 2. Providing guidance and suggestions on CSR activities to the CSR role holders and to monitor its progress, bringing greater transparency and experience in the execution of CSR activities of the Company etc. Shri Rajesh Kumar Mangal, Chairman of the Committee, ceased to be a Member w.e.f. 1st December, 2019. Shri V.S. Oberoi, Independent Director, was appointed as Member & Chairman of the Committee w.e.f. 30th December, 2019. Subsequently Shri Rajiv Bansal, Government Director ceased to be a Member of the Committee w.e.f. 8th January, 2020 and Shri Rajesh Aggarwal, Government Director, was inducted as a Member of the Committee with effect from 8th January, 2020. Shri Vishal V Sharma, Independent Director ceased to be a Member w.e.f. 9th February, 2020. Shri H.P. Shah, Independent Director was inducted as a Member of the Committee w.e.f. 11th February, 2020. As on 31st March, 2020, the Committee comprises two Independent Directors, two Government Directors, Director (Finance) and Director (Human Resources) as Members. Subsequently, Shri V.S. Oberoi, Independent Director ceased to be the Chairman of the Committee w.e.f. 10th April, 2020. Shri H.P. Shah, Independent Director was appointed as the Chairman of the Committee w.e.f. 10th July, 2020.
Annual Report 2019-20 109 Seven meetings of the Corporate Social Responsibility Committee were held during the Financial Year 2019-20 on the following dates:
20th May, 2019 14th June, 2019 15th July, 2019 9th August, 2019 7th November, 2019 13th February, 2020 30th March, 2020 Attendance at the Corporate Social Responsibility Committee Meetings Names of the Members No. of meetings attended %* Shri Rajesh Kumar Mangal, Chairman (up to 30th November, 2019) 5 100* Shri V.S. Oberoi, Chairman (w.e.f. 30th December, 2019) 1 50* Shri K. Padmakar, Member 7 100 Dr. K. Ellangovan, Member 4 57.14 Shri Rajiv Bansal, Member (up to 7th January, 2020) 4 80* Shri Rajesh Aggarwal, Member (w.e.f. 8th January, 2020) 2 100* Shri N. Vijayagopal, Member 7 100 Shri Vishal V Sharma, Member (up to 8th February, 2020) 5 100* Shri H.P. Shah, Member (w.e.f. 11th February, 2020) 2 100* * Percentage computed by considering the meetings attended with the total meetings held during the Director’s tenure. F) Risk Management Committee The Regulation 21 of the Listing Regulations requires the Company through its Board of Directors to constitute a Risk Management Committee. In compliance thereto, the Board has constituted the Risk Management Committee. Shri Vishal V Sharma, Independent Director, ceased to be a Member of the Committee w.e.f. 9th February, 2020. Further, Shri H.P. Shah, Independent Director was appointed as a Member and Chairman of the Committee w.e.f. 12th March, 2020. Smt. J.M. Shanti Sundharam, Independent Director, ceased to be Chairperson w.e.f. 5th March, 2020. As on 31st March, 2020, the Committee comprised Shri H.P. Shah, Independent Director as Chairman and Shri A.K. Singh, Director (Marketing), Shri R. Ramachandran, Director (Refineries), Shri N. Vijayagopal, Director (Finance) and Shri V.S. Oberoi, Independent Director as Members. Shri V.S. Oberoi, Independent Director ceased to be a Member w.e.f. 10th April, 2020. During the Financial Year 2019-20, one meeting of the Risk Management Committee was held on 14th June, 2019 and the said meeting was attended by all the respective Members of the Committee. The role and responsibilities of the Risk Management Committee includes the following: 1) Review and recommend the risk management plan comprising risks assessed and their mitigation plans, identification of corporate level risks and their mitigation plans for approval of the Board with the recommendation by the Audit Committee; 2) Review and recommend the Risk Management Report consisting of status of risk mitigation plans (including reporting of risks by businesses) to the Audit Committee/Board; 3) Review and recommend the statement to be published in the Board’s Report indicating development and implementation of the risk management policy for the Company; 4) Review and recommend any other proposal in relation to Risk Management to be put up to the Audit Committee/Board.
110 Bharat Petroleum Corporation Limited G) Sustainable Development Committee The terms of reference of the Sustainable Development Committee are to oversee, approve, provide budgetary allocation and monitor the projects covered under Sustainable Development projects as part of the business plan of business units and involves an enduring and balanced approach to environmental responsibilities and includes reviewing of the ‘Business Responsibility Report’ on a half yearly basis and to place this report to the Board for information on an annual basis. In line with DPE Guidelines on Sustainable Development, the Board reconstituted the Sustainable Development Committee. During the Financial Year 2019-20, Shri H.P. Shah, Independent Director, was inducted as a Member of the Committee w.e.f. 11th February, 2020 and as Chairman w.e.f. 12th March, 2020. Shri Vishal V Sharma, Independent Director, ceased to be a Member w.e.f. 9th February, 2020. Smt. J.M. Shanti Sundharam, Independent Director, ceased to be Chairperson of the Committee w.e.f. 5th March, 2020. As on 31st March, 2020, the Committee comprised Shri H.P. Shah, Independent Director as Chairman and Shri A.K. Singh, Director (Marketing) and Shri R. Ramachandran, Director (Refineries) as Members. Two meetings of the Sustainable Development Committee were held during the Financial Year 2019-20 on 15th July, 2019 and on 8th January, 2020, which were attended by all the respective Members. H) Separate Meeting of Independent Directors The Company could not hold the meeting of Independent Directors, which is normally held during the last month of the financial year, in view of the massive outbreak of the COVID-19 pandemic and difficulty in availability of Directors. In terms of MCA circular dated 24th March, 2020, the MCA has given relaxation in respect of holding the meeting of Independent Directors for the year 2019-20. 4) Remuneration to Directors BPCL being a Government Company, appointment and remuneration of Whole-Time Directors are determined by the Government through the Ministry of Petroleum & Natural Gas. The Government Directors do not receive any remuneration from the Company. The Independent Directors received sitting fees of ` 40,000/- for each of the Board/Audit Committee/other Committee Meetings attended by them during the Financial Year 2019- 20. Performance Linked Incentives are payable to the Whole-time Functional Directors as employees of the Company as per the policy applicable to all employees of the Company. Details of remuneration paid / payable to the Whole-time Directors during the Financial Year 2019-20 are as follows :-
Name of Directors All elements of remuneration packages of the Directors Total i.e. salary, benefits, bonus, pension, etc. (`) Salary & Contribution to Other Performance Allowances Provident Fund Benefits & Related Pay (`) & Other Funds Perquisites (`) (`) (`) Shri D. Rajkumar 32,40,723 7,77,773 13,95,178 17,10,817 71,24,491 Chairman & Managing Director Shri R. Ramachandran 30,69,131 7,36,592 14,90,089 13,50,495 66,46,307 Director (Refineries) Shri K. Padmakar 30,15,626 7,23,750 19,00,641 13,27,083 69,67,100 Director (Human Resources) Shri A. K. Singh 29,57,364 7,09,768 14,53,342 11,47,273 62,67,747 Director (Marketing) Shri N. Vijayagopal 29,38,575 7,05,257 17,92,644 10,76,275 65,12,751 Director (Finance) TOTAL 1,52,21,419 36,53,140 80,31,894 66,11,943 3,35,18,396
Annual Report 2019-20 111 Service Contracts : As per terms & conditions of appointment communicated by the Administrative Ministry. (i.e. from the date of taking over charge of the post or till the date of superannuation or until further orders, whichever is earlier) Notice period : Three months. The Company has not introduced any Stock Options Scheme during the financial year 2019-20. Non-Executive Directors do not hold any Shares in the Company during the Financial Year 2019-20. The sitting fees paid to the Independent Directors for attending the meetings of the Board/Committee during the Financial Year 2019-20 are given below:
Name of the Director Amount (`) Shri Rajesh Kumar Mangal (up to 30th November, 2019) 9,60,000 Shri Vishal V Sharma (up to 8th February, 2020) 11,20,000 Smt. J. M. Shanti Sundharam (up to 4th March, 2020) 10,40,000 Shri V.S. Oberoi 12,00,000 Shri H.P. Shah (w.e.f. 16th July, 2019) 5,60,000 5) General Body Meetings a. The details of Annual General Meetings during the last three years are given below:
Meeting details Date and Time Venue of the Meeting 64th Annual General 12th September, 2017 Rama and Sundri Watumull Auditorium, Kishinchand Meeting at 10:30 a.m. Chellaram College (K.C College), 124, Dinshaw Wacha Road, Churchgate, Mumbai 400 020 65th Annual General 11th September, 2018 Y.B.Chavan Auditorium, Yashwantrao Chavan Meeting at 10:30 a.m. Pratishthan, General Jagannathrao Bhosale Marg, 66th Annual General 30th August, 2019 Mumbai 400 021 Meeting at 10.30 a.m. b. The details of Special Resolutions passed in the previous three Annual General Meetings are given below:
Meeting details Date and Time of the Meeting Special Resolutions passed at the Meeting 64th Annual 12th September, 2017 1. Approval of Private Placement of Non-Convertible General Meeting at 10:30 a.m. Bonds/Debentures and/or Debt Securities; 2. Approval of Material Related Party Transactions. 65th Annual 11th September, 2018 1. Approval of Private Placement of Non-Convertible General Meeting at 10:30 a.m. Bonds/Debentures and/or Debt Securities. 66th Annual 30th August, 2019 1. Reappointment of Shri Rajesh Kumar Mangal as General Meeting at 10.30 a.m. an Independent Director. c. There was no Special Resolution passed through Postal Ballot in the year 2019-20 and presently, there is no Special Resolution proposed to be conducted through Postal Ballot. 6) Means of Communication of Financial performance In order to give wider publicity and to reach the Members and other investing public across the nation, the quarterly & half-yearly results were published in various editions of leading newspapers. The Auditor’s Report on Limited Review/ Annual Audited Financial Results were filed with the Stock Exchanges. The quarterly and annual results were sent to the Shareholders at their registered email IDs.
112 Bharat Petroleum Corporation Limited The periodic financial results of the Company are also displayed on the website of the Company at www.bharatpetroleum.in and the websites of BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). 7) General Shareholders’/ Members information: SEBI has included BPCL shares for compulsory trading in dematerialised form.
Annual General Meeting : Monday, 28th September, 2020 at 11:00 a.m. IST Date, Time and Venue The Company is conducting the meeting through VC / OAVM pursuant to the MCA Circulars. For details please refer to the Notice of this AGM. Financial Year BPCL follows the financial year from April to March. The Unaudited Results/ Audited Results for the four quarters/year end were taken on record by the Board on the following dates: Period Ended Date of Board Meeting Unaudited/Audited Apr-Jun 2019 9th August, 2019 Unaudited Jul–Sep 2019 7th November, 2019 Unaudited Oct-Dec 2019 13th February, 2020 Unaudited Jan-Mar 2020 3rd June, 2020 Audited F.Y. 2019-20 3rd June, 2020 Audited Dividend Payment Dates The Board of Directors at its meeting held on 12th March, 2020 approved declaration of Interim Dividend of ` 16.50 per equity share for face value of ` 10/- each for the Financial Year 2019-20. The Company has paid the above dividend on 27th March, 2020. Date of Book Closure Tuesday, 22nd September, 2020 to Monday, 28th September, 2020 (both days inclusive), for the purpose of AGM. Debt Securities The details of listing of Non-convertible Debentures issued by the Company are given below: BPCL Debentures 2017-Series I Listed on wholesale debt market segment (` 550 crore issued on 10th March 2017) of BSE and NSE BPCL Debentures 2018-Series I Listed on wholesale debt market segment (` 750 crore issued on 16th January 2018) of BSE and NSE BPCL Debentures 2019 Series I Listed on wholesale debt market segment (` 1000 crore issued on 11th March 2019) of BSE and NSE BPCL Debentures 2020 Series I Listed on wholesale debt market segment (` 1995.20 crore issued on 6th July 2020) of BSE and NSE Debenture Trustee SBI CAP Trustee Company Ltd Appejay House, 6th Floor, 3, Dinshaw Wachha Road, Churchgate, Mumbai 400 020 Tel 022-4302 5555 Fax 022-2204 0465 Details of Credit Rating obtained by BPCL along with revision for all debt instruments or any fixed deposits or scheme or proposal of listed entity involving mobilization of funds
Annual Report 2019-20 113 Instruments Rating Rating at the Changes during Ratings at the Ratings at on Agency beginning of the year end of year date the year Non-Convertible CRISIL CRISIL AAA CRISIL, on CRISIL AAA CRISIL AAA Debenture (Stable) 29th November, (Stable) – (Stable) – (Rating 1. BPCL Debentures 2019, has been (Rating Watch Watch with 2017-Series I placed the Long with Developing Developing 2. BPCL Debentures term rating of Implications) Implications) 2018-Series I AAA (Stable) on 3. BPCL Debentures “Rating Watch 2019-Series I with Developing Implications” 4. BPCL Debentures considering the 2020-Series I disinvestment (issued on 6th plans July’20) Non-Convertible CARE CARE AAA CARE, on CARE AAA CARE AAA Debenture (Stable) 6th December, (Stable) (Rating (Stable) (Rating 1. BPCL Debentures 2019, has been Watch with Watch with 2017-Series I placed the Long Developing Developing 2. BPCL Debentures term rating of Implications) Implications) 2018-Series I AAA (Stable) on 3. BPCL Debentures “Rating Watch 2019-Series I with Developing Implications” 4. BPCL Debentures considering the 2020-Series I disinvestment (issued on 6th plans. July’20) Bank facilities – Long CRISIL CRISIL AAA CRISIL, on CRISIL AAA CRISIL AAA Term (Stable) 29th November, (Stable) – (Stable) – (Rating 2019, has been (Rating Watch Watch with placed the Long with Developing Developing term rating of Implications) Implications) AAA (Stable) on “Rating Watch with Developing Implications” considering the disinvestment plans Bank Facilities – CRISIL CRISIL A1+ – CRISIL A1+ CRISIL A1+ Short Term Commercial Papers CRISIL CRISIL A1+ – CRISIL A1+ CRISIL A1+ Commercial Papers CARE CARE A1+ – CARE A1+ CARE A1+
114 Bharat Petroleum Corporation Limited Instruments Rating Rating at the Changes during Ratings at the Ratings at on Agency beginning of the year end of year date the year Senior Unsecured Fitch BBB- (Stable) – BBB- (Stable) BBB-(Negative) Debt- Foreign (Fitch on Currency 18th June, 2020 Fitch has changed the India’s sovereign outlook from Stable to Negative, with the change in the India’s sovereign outlook from Stable to Negative, Fitch has also hanged the BPCL’s outlook from BBB-(Stable) to BBB-(Negative) Senior Unsecured Moody's Baa2 (Stable) Moody’s on Baa2 (Negative) Baa3-(Negative) Debt- Foreign 8th November, Further, on Currency 2019, with the 2rd June, 2020, change in the Moody’s has sovereign rating of downgraded India, has changed India’s sovereign the outlook from rating to Baa3 Baa2 (Stable) to from Baa2 and Baa2 (Negative). with the change Further, Moody’s, in the sovereign on 26th November, rating of India, 2019, while Moody’s has retaining the rating also changed the of Baa2 (Negative) BPCL’s rating to have put the Baa3 (Negative) rating on "Review from Baa2 for Downgrade" (Negative). considering the disinvestment plan. Listing on Stock The Company’s shares are listed on the following Stock Exchanges: Exchanges & Security Name of Stock Exchange Security Code / Symbol Code BSE Ltd. 500547 Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001. National Stock Exchange Ltd. BPCL Exchange Plaza, Plot No. C/1 Bandra Kurla Complex, Bandra (E), Mumbai 400 051. The Listing Fees have been paid for the year 2020-21 to both the above Exchanges.
Annual Report 2019-20 115 ISIN Number For National Securities Depository Ltd. (NSDL) & Central INE029A01011 Depository Services India Ltd. (CDSL) for equity shares Market Price Data High, low during each month in the last financial year Please see Annexure I Performance in comparison to broad based indices Please see Annexure II i.e. BSE 100 Registrar and Shri Benjamin Rajaratnam Transfer Agents General Manager (Capital Issues Division), Data Software Research Co. Pvt. Ltd. 19, Pycrofts Garden Road, Off. Haddows Road, Nungambakkam, Chennai- 600 006 Ph: +91-44-2821 3738 / 2821 4487 Fax: 91-44-2821 4636 Email: [email protected] Share Transfer A Committee comprising two Whole-time Directors considers the requests for transfer System / transmission of shares, dematerialisation of shares, etc. A Committee comprising four Directors i.e. two Whole-Time Directors and two Part-time Directors considers requests for issue of share certificates. Requests for dematerialization of shares are processed and confirmation is given to the respective depositories viz. NSDL and CDSL within 15 days. Transfer of Equity Shares in electronic form are effected through the depositories and the Company does not have any involvement in the same. Distribution of Shareholders No. of shares Held % of holding Shareholding as on 1) Govt. of India 1,14,91,83,592 52.98 31st March, 2020 2) Govt. of Kerala 1,86,66,666 0.86 3) BPCL Trust for Investments in Shares 20,23,72,422 9.33 4) Mutual Funds/ UTI 27,76,23,001 12.80 5) Financial Institutions/ Banks 28,93,434 0.13 6) Insurance Companies 14,48,23,947 6.68 7) Foreign Institutional Investors 26,64,90,136 12.28 8) Bodies Corporate 3,20,83,037 1.48 9) Others 7,51,16,509 3.46 Total 2,16,92,52,744 100.00 Distribution of shareholding on number of shares held by the shareholders and shareholding pattern are given in Annexure III. Dematerialization of Out of the shares held by the Shareholders, 98.99% are held in dematerialised form shares and liquidity and balance in physical form as on 31st March, 2020. The Company has not issued any GDRs /ADRs/ Warrants, etc. Plant Locations Mumbai Refinery : Bharat Petroleum Corporation Ltd., Mahul, Mumbai 400 074 Kochi Refinery : Bharat Petroleum Corporation Ltd., Ambalamugal, Kochi 682 302 Lubricant Plants : Bharat Petroleum Corporation Ltd., Wadilube LOBP, Mallet Road, Chinchbunder, Wadibunder, Mumbai 400 009 Sewree C-Installation, Sewree Fort Road, Sewree (East), Mumbai 400 015 LOBP Tondiarpet, Post Box No.1152, 35 Vaidyanatha Mudali Street, Tondiarpet, Chennai-600 081 LOBP Budge Budge, 2 Graham Road, P.O. Budge Budge, Dist. 24-Parganas [South], Budge Budge 700137 MAK Lube Plant, Hastinapur Yojna, Village – Tilla Shahbajpur, Loni, Distt, Ghaziabad 201 102
116 Bharat Petroleum Corporation Limited Address for The Secretarial Department General Manager (Capital Issues Division), Correspondence Bharat Petroleum Corporation Ltd. Data Software Research Co. Pvt. Ltd. Bharat Bhavan No.1, Ground Floor, 19, Pycrofts Garden Lane, 4&6, Currimbhoy Road Off. Haddows Road, Nungambakkam, Ballard Estate, Mumbai 400 001 Chennai- 600 006 Tel. 022 – 2271 3170 / 2271 3435 Ph: +91-44-2821 3738 / 2821 4487 Fax. 022 – 2271 3759/ 022- 2271 3688 Fax: 91-44-2821 4636 Email : [email protected] Email : [email protected]
Investors’ Service Centre BPCL’s Investors’ Service Centre (ISC), by Data Software Research Co. Pvt. Ltd., our Registrar & Share Transfer Agents, has been functioning at the Registered Office of the Company at the following address : Data Software Research Co. Pvt. Ltd. (DSRC) C/o. Bharat Petroleum Corporation Ltd. Bharat Bhavan No.1, First Floor, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai 400 001 Tel. No. 022 – 2271 3170 Fax. No. 022 – 2271 3759/ 022-2271 3688 Email : [email protected] This Centre has been effectively catering to the needs of the Members / Investors. It facilitates our efficient investor complaint redressal mechanism. For any assistance/information on share related matters such as transfer / transmission of shares, issue of duplicate share certificates, dividend etc., or for redressal of any grievance in this regard, Members / Investors located in western region/other places may get in touch with ISC at the above address. Further, BPCL has designated an exclusive e-mail ID: [email protected] for the purpose of communication from Members including investor complaints. 8) Management Discussion & Analysis Report A detailed chapter on Management Discussion & Analysis is attached to the Directors’ Report. 9) Other Disclosures: a. Details of ‘Related Party Disclosures’ are shown in Notes forming part of Accounts. The related party transactions were placed before the Audit Committee/Board for approval. The Company has incurred certain expenses on behalf of subsidiaries/joint ventures as co-promoter and such expenses are recoverable subsequently from the subsidiaries/joint venture companies. There were no transactions of material nature that may have potential conflict with the interests of the Company at large. b. The Company has complied with all mandatory requirements entered into with Stock Exchanges/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance except for the following: 1) The Company did not have a Woman Independent Director and the optimum combination of executive and non-executive Directors for the period from 5th March, 2020 to 31st March, 2020 as required under Regulation 17 (1) (a) of LODR on its Board. 2) The Company did not have requisite number of Independent Directors as required under Regulation 17 (1) (b) of LODR on its Board for the period under review i.e. 1st April, 2019 to 31st March, 2020. Bharat Petroleum Corporation Ltd. is a Government Company under the Administrative Control of Ministry of Petroleum and Natural Gas. The nomination/appointment of all categories of Directors are done by Government of India in accordance with the laid down DPE Guidelines. The subject matter of nomination/appointment of adequate number of Independent Directors including a
Annual Report 2019-20 117 Woman Director falls under the purview of the Government of India. BPCL has from time to time communicated to the Ministry of Petroleum & Natural Gas with respect to the requirements and was informed of action initiated to fulfill the requirements. BPCL has received notices from BSE and NSE which were replied suitably to them in this regard. c. BPCL has also implemented the Whistle Blower Policy and no personnel has been denied access to the Audit Committee. d. Details of compliances with mandatory requirements and adoption of the non-mandatory requirements: The Company has been adhering to the provisions of the laws and guidelines of regulatory authorities including SEBI, and covenants in the agreements with the Stock Exchanges and Depositories. There was no instance of non-compliance of any provisions of law, guidelines from regulatory authorities and the matters related to capital markets, during the last three years, except as stated above. In addition to compliance of mandatory requirements, the Company has fulfilled the following discretionary requirements as specified in Part E of Schedule II of Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:- a) Shareholders Rights: The Company has adopted requirements with regard to sending of quarterly / half yearly financial results to the Members of the Company. b) The Company has moved towards a regime of Standalone and Consolidated Financial Statements with unmodified audit opinion. e. The web link for policy for determining ‘material’ subsidiaries is as follows: https://www.bharatpetroleum. com/about-bpcl/our-policies.aspx f. The web link for policy on dealing with related party transactions is as follows: https://www.bharatpetroleum. com/about-bpcl/our-policies.aspx g. The web link for policy on dealing with details of familiarisation programmes imparted to Independent Directors is as follows: https://www.bharatpetroleum.com/about-bpcl/our-policies.aspx h. On 31st March 2020, the Company has increased its stake in BORL from 50% to 63.38 % by conversion of warrants into shares. BORL has carried out Secretarial Audit by Practising Company Secretary. i. Disclosure of commodity price risks and commodity hedging activities: The Company has adopted a Risk Management Policy framework. Accordingly, the Company periodically informs the Board Members about the risk assessment and procedures for minimizing the risks. j. During the financial year, there were no funds raised by way of preferential allotment or through issue of non-convertible debentures or bonds. k. A certificate from M/s. Dholakia & Associates LLP, Practising Company Secretaries, certifying that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of the companies by SEBI, Ministry of Corporate Affairs or any such statutory authority has been obtained. l. BPCL nominates Directors for relevant training programmes/seminars conducted by reputed Institutions/ SCOPE/IICA etc. Further, strategy workshops are held to deliberate strategic issues, policy decisions etc. m. CEO and CFO Certification: The Chairman & Managing Director and Director (Finance) have certified to the Board in accordance with Part B of Schedule II of Regulation 17(8) of the SEBI Regulation, 2015 and DPE Guidelines on Corporate Governance for the Financial Year 2019-20. n. Disclosures with respect to demat suspense account/unclaimed suspense account: No Shares are kept under demat/unclaimed suspense account. o. There are no items of expenditure in the books of accounts, which are not for the purpose of Business. Further no expenses were incurred which were personal in nature and incurred for the Board of Directors
118 Bharat Petroleum Corporation Limited and Top Management of the Company. Administrative & Office expenses and Finance expenses constitute 0.51% and 0.67% of the total expenses respectively for the Financial Year 2019-20. Employee Benefit expenses, Repair maintenance & Stores and Spares as a percentage of total expenses constitute 1.13% & 0.42% for the year 2019-20, as against 1.11% & 0.42% last year. There is a decrease in Administrative & Office expenses as % of total expenses (from 0.72% to 0.51%) mainly due to implementation of IND AS 116 “Lease” effective 01st April 2019, wherein rent & utilities has been reclassified as Depreciation and Finance Cost. There is an increase in Finance expenses during the year (from 0.40% to 0.67%) mainly due to implementation of IND AS 116 “Lease” effective 01st April 2019 & increase in average borrowing during this year, as compared to the previous year. p. Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended, the Company had earlier adopted the ‘Code of Conduct, Procedure and Disclosures for Prevention of Insider Trading in the Securities of Bharat Petroleum Corporation Limited’ and ‘Code of Corporate Disclosure Practices’. Consequent to introduction of SEBI (Prohibition of Insider Trading) Regulations, 2015 which replaced the SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company adopted the ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information in Bharat Petroleum Corporation Limited’ and ‘Code of Conduct to Regulate, Monitor and Report Trading for Prevention of Insider Trading in the Securities of Bharat Petroleum Corporation Limited’ in the Board meeting held on 13th May, 2015. Subsequently SEBI, vide its notification dated 31st December, 2018 has amended the Prohibition of insider Trading Regulations, whereby listed companies are required to formulate certain additional Policies and procedures. These amendments have become effective from 1st April, 2019. Accordingly, the Company has adopted a revised Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices and formulated the Policy for determination of legitimate purpose and Policy for inquiry in case of leak of Unpublished Price Sensitive Information (UPSI).The Company Secretary has been appointed as the Compliance Officer and Chief Investor Relations Officer for implementation of the said Codes. q. In line with SEBI Regulations, the Company has implemented the following policies: 1. Policy on Preservation of documents; 2. Policy on materiality of events or information and they are disclosed on website of the Company under the link: https://www.bharatpetroleum.com/about-bpcl/our-policies.aspx r. Risk Management Policy The Risk Management policy of the Company identifies that it has direct and substantial price risk exposure to certain commodities such as Crude Oil, Petroleum Products, Freight, Precious metals, Petrochemicals and Metals and the policy provides the broad framework and governance for undertaking Risk Management activities in these commodities.
Exposure in Commodities Commodity Name Exposure Exposure % of such exposure hedged through in INR in Quantity commodity derivatives towards the terms Domestic market International Total particular towards the market commodity particular (` Crore) commodity OTC Exchange OTC Exchange (Qty. TMT) Raw Material (Crude Oil) 3,717 1,764 0% 0% 0% 0% 0.00% Finished Products 15,694 3,343 0% 0% 0% 0% 0.00% Notes:- a. Raw Material consists of Crude Oil Closing, In transit and In process Inventory as on 31st March, 2020.
Annual Report 2019-20 119 b. Finished Products majorly consist of Gasoline, Gasoil, SKO, Naphtha, ATF, FO and LPG Closing inventories as on 31st March, 2020. c. The exposure value is value of Closing inventory as on 31st March, 2020. d. During FY 19-20, BPCL hedged product crack spreads (Difference between Product price and Dubai Crude Oil price) through Swaps/Options in the international Over the Counter market towards refinery margin to cover the operating expenses of the refinery. e. BPCL is an Oil Refining and Marketing Company and pricing of major petroleum products naturally hedge Crude purchase prices to a large extent. s. During the year, there were 7 complaints of sexual harassment in respect of our employees, out of which 5 were resolved by the Internal Complaints Committee and 2, received in March, 2020 were pending as at the end of the financial year. t. Total fees for all services paid by the Company and its subsidiaries, on a consolidated basis, to the Statutory Auditors, M/s CVK & Associates and M/s Borkar & Muzumdar are as follows:
Particulars Amount in ` Audit fees 58,00,000 Fees for other services – Certification 36,72,000 Reimbursement of out of pocket expenses 1,27,645 Total 95,99,645
120 Bharat Petroleum Corporation Limited ANNEXURE I BPCL Market Price Data BSE NSE April 2019- High Low Monthly Volume High Low Monthly Volume March 2020 (` per share) (` per share) (No. of shares) (` per share) (` per share) (No. of shares) April 398.9 333 65,05,124 399.5 333.45 11,78,93,378 May 421.3 348.2 69,89,616 421.7 348 16,09,24,350 June 419.5 373.35 40,41,434 419.9 373.1 9,50,04,512 July 392.5 328.5 43,18,419 392.85 328.2 9,86,47,780 August 357.65 308.55 22,99,033 357.85 308.35 7,66,22,831 September 482 342.35 1,35,46,082 482.05 342.3 31,03,68,965 October 547.5 478.45 1,33,62,552 545 475.45 26,85,72,390 November 549.7 488 69,87,555 549 488 17,76,53,822 December 511.45 471.75 49,09,396 509.5 471.65 12,37,51,062 January 494 448.8 42,98,367 493.9 448.55 13,53,70,076 February 510 421.55 43,26,489 510 420.5 13,18,17,556 March 454.1 252 1,09,48,826 454.4 252 25,53,62,130
MARKET CAPITALISATION/SHARES TRADED DURING 1st APRIL 2019 TO 31st MARCH 2020 BSE NSE No. of Shares traded 8,25,32,893 1,95,19,88,852 No. of Shares 2,16,92,52,744 2,16,92,52,744 Highest Share Price (`) 549.7 549 Lowest Share Price (`) 252 252 Closing Share Price as on 31st March 2020 (`) 316.05 316.9 Market Capitalisation as on 31st March 2020 (` in crore) 68,559.23 68,743.62
ANNEXURE II BPCL MARKET PRICE MOVEMENT IN COMPARISON TO BSE 100 INDICES
Share Prices / BSE100 monthly High
1000 14500
900 12536.11 12156.32 12224.08 12250.84 12356.82 13000 11843.65 12064.95 800 12353.17 11500 12029.44 12104.76 700 11292.96 11541.36 10000 e 600
Pric 511.45 8500 e 500 ar 547.5 549.7 494 510 7000 Sh 482
400 454.1 BSE100 398.9 421.3 419.5 392.5 5500 BPCL 300 357.65 200 4000
100 2500
0 1000 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
BPCL Share Price BSE100
Annual Report 2019-20 121 ANNEXURE III
DISTRIBUTION OF SHARE HOLDING AS ON 31st March, 2020 NO. OF. EQUITY SHARES HELD NO. OF SHARE HOLDERS NO. OF SHARES % OF TOTAL UPTO 5000 2,20,525 4,75,31,479 2.19 5001 TO 10000 1,216 83,97,224 0.39 10001 TO 50000 705 1,53,46,573 0.71 50001 TO 100000 203 1,47,90,735 0.68 100001 TO 500000 279 6,78,09,212 3.13 500001 TO 1000000 94 6,68,79,077 3.08 1000001 TO 2000000 53 7,42,48,012 3.42 2000001 TO 3000000 18 4,47,41,207 2.06 3000001 AND ABOVE 46 1,82,95,09,225 84.34 Total 2,23,139 2,16,92,52,744 100.00 SHAREHOLDING PATTERN OF BPCL AS ON 31st MARCH, 2020 (PERCENTAGE)
52.98 % Government of India
0.86% Government of Kerala
9.33% BPCL Trust for Investments in Shares
12.80% Mutual Funds / UTI
0.13% Financial Institutions / Banks
6.68% Insurance Companies
12.28% Foreign Institutional Investors
1.48% Private Corporate Bodies
3.46% Others
CODE OF CONDUCT DECLARATION I hereby declare that all the Board Members & Senior Management Personnel have affirmed compliance with the Code of Conduct as adopted by the Board of Directors for the year ended 31st March, 2020. Sd/- D. Rajkumar Place :Mumbai Chairman & Managing Director Date : 8th July, 2020 Bharat Petroleum Corporation Limited
122 Bharat Petroleum Corporation Limited Certificate under Para 10(i) of Part C of Schedule V read with Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’). To The Members of Bharat Petroleum Corporation Limited 1. We have been engaged to issue certificate that none of the directors on the board of the Bharat Petroleum Corporation Limited (“Company”) having CIN L23220MH1952GOI008931 have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority in terms of Para 10 (i) of Part C of Schedule V read with Regulations 34(3) and 53 (f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations):- 2. We have examined the following: (a) The declaration given by each of the Directors of the Company with respect to their interest in other entities as Director or otherwise along with names of their relatives in pursuance of Section 184 of the Companies Act, 2013 and taken on record by the Company, (b) Declarations given by all the Directors of the Company confirming that they are not disqualified to hold the Office of Directors as on 31st March, 2020 in pursuance of Section 164 of the Companies Act, 2013 and taken on record by the Company, (c) The particulars of Directors of the Company as displayed on the web portal of the Ministry of Corporate Affairs and (d) General Search on the website of the Securities and Exchange Board of India. 3. Based on the above verification and to the best of our information and according to the explanations provided to us, we are of the opinion that none of the following Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of Company by the Board/Ministry of Corporate Affairs or any such statutory authority as on 31st March, 2020: No. Name of the Directors DIN 1 Shri. Rajkumar Duraiswamy 00872597 2 Shri. Rajesh Madanlal Aggarwal 03566931 3 Shri. Neelakantapillai Vijayagopal 03621835 4 Shri. Ellangovan Kannan Kamala 05272476 5 Shri. Arun Kumar Singh 06646894 6 Shri. Ramamoorthy Ramachandran 07049995 7 Shri. Padmakar Kappagantula 08021800 8 Shri. Harshadkumar Prabhudas Shah 08511473 9 Shri. Vinay Sheel Oberoi 07943886 4. It should be noted that our responsibility is to express a reasonable assurance in the form of an opinion as to the qualification/eligibility of each of the Directors of the Company to hold the office as Director in the Company in accordance with the generally accepted procedure and the process of due-diligence followed based on the available information on best efforts basis as on 31st March,2020 and it is neither an audit nor an expression of opinion on the personal credentials of the Directors of the Company. For DHOLAKIA & ASSOCIATES LLP (Company Secretaries)
Sd/- CS Bhumitra V. Dholakia Designated Partner FCS-977 CP No. 507 Place : Mumbai Date : 10th July, 2020 UDIN : F000977B000438964
Annual Report 2019-20 123 Compliance Certificate on Corporate Governance under Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015 To, The Members of Bharat Petroleum Corporation Limited We have examined the compliance of conditions (via electronic platform due to lockdown) of Corporate Governance by Bharat Petroleum Corporation Limited (“the Company”) for the year ended March 31, 2020, prescribed in Regulations 17 to 27, Clauses (b) to (i) of Regulation 46(2) and paragraph C, D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”). The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our Examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion, and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the aforesaid provisions of SEBI LODR except that the Company did not have a Woman Independent Director as required under Regulation 17 (1) (a) of SEBI LODR on its Board of Directors and that the optimum combination of executive and non-executive directors was not complied with for the period from 05.03.2020 to 31.03.2020 and that the Company did not have requisite number of Independent Directors as required under Regulation 17 (1) (b) of SEBI LODR on its Board of Directors for the period under review i.e. 01.04.2019 to 31.03.2020. We also state that the Company being a Government Company under the administrative control of the Ministry of Petroleum & Natural Gas (MoP&NG), the power to appoint Directors (including Independent Directors) and the terms and conditions of such appointment, vests with the Government of India. The matter regarding appointment of required number of Independent Directors and Women Independent Director has been taken up with MoP&NG from time to time. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.
For DHOLAKIA & ASSOCIATES LLP (Company Secretaries)
Sd/- CS Bhumitra V. Dholakia Designated Partner FCS-977 CP No. 507 Place : Mumbai Date : 10th July, 2020 UDIN : F000977B000438942
124 Bharat Petroleum Corporation Limited Compliance Certificate on Corporate Governance under guidelines for Administrative Ministries/Departments and Central Public Sector Enterprises, 2010 To, The Members of Bharat Petroleum Corporation Limited We have examined the compliance of conditions (via electronic platform due to lockdown) of Corporate Governance by Bharat Petroleum Corporation Limited (“the Company”) for the year ended March 31, 2020, as stipulated in the Guidelines for Administrative Ministries/Departments and Central Public Sector Enterprises, 2010 (“the Guidelines”), issued by the Department of Public Enterprises (DPE) of Ministry of Heavy Industries and Public Enterprises, Government of India. The Compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implications thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in provisions as specified in the Guidelines issued by DPE except for non-compliance in terms of clauses 3.1.1. and 3.1.2 of the guidelines, in terms of optimum combination of Directors and, in terms of Functional Directors exceeding half of the Board of Directors for the period 05.03.2020 to 31.03.2020 and in terms of clause 3.1.4 with regard to half of the Board of Directors to comprise of Independent Directors for the period i.e. 01.04.2019 to 31.03.2020. We also state that the Company being a Government Company under the administrative control of the Ministry of Petroleum & Natural Gas (MoP&NG), the power to appoint Directors (including Independent Directors) and the terms and conditions of such appointment, vests with the Government of India. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.
For DHOLAKIA & ASSOCIATES LLP (Company Secretaries)
Sd/- CS Bhumitra V. Dholakia Designated Partner FCS-977 CP No. 507 Place : Mumbai Date : 10th July, 2020 UDIN : F000977B000438942
Annual Report 2019-20 125 Business Responsibility Report About this report The Business Responsibility Report has been prepared by BPCL, in accordance with Regulation 34 (2) (f) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation 2015, which mandates that the Annual Report of the top one thousand listed entities, based on Market Capitalization at the BSE and NSE, shall contain a Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective. The Reporting framework is based on the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ (NVGs) issued by the Ministry of Corporate Affairs, Government of India, in July 2011. It outlines the Company’s performance against the nine Principles and Core elements for each of these Principles. The Business Responsibility Report of BPCL is based on the format suggested by SEBI in their circular.
Section A: General Information about the Company 1. Corporate Identity Number (CIN) of the Company L23220MH1952GOI008931 2. Name of the Company Bharat Petroleum Corporation Limited 3. Registered Address Bharat Bhavan, 4&6 Currimbhoy Road, Ballard Estate, Mumbai 400001 4. Website https://www.bharatpetroleum.in 5. E-mail id [email protected] 6. Financial Year Reported 2019-20 7. Sector(s) that the Company is engaged in (industrial activity code-wise)
Group Class Sub-class Description 192 1920 19201 Production of liquid and gaseous fuels, illuminating oils, lubricating oils or greases or other products from crude petroleum or bituminous minerals 192 1920 19203 Bottling of LPG /Compressed Natural Gas (CNG) 192 1920 19209 Manufacture of other petroleum products (includes petroleum bitumen and other residues of petroleum oils or of oils obtained from bituminous minerals) 352 3520 35202 Distribution and sale of gaseous fuels through mains 351 3510 35105 Electric power generation using solar energy 351 3510 35106 Electric power generation using other non-conventional sources 493 4930 49300 Transport via pipeline 466 4661 46610 Wholesale of solid, liquid and gaseous fuels and related products 473 4730 47300 Retail sale of automotive fuel in specialized stores [includes the activity of petrol filling stations] 477 4773 47736 Retail sale of household fuel oil, bottled gas, coal and fuel wood
8. List three key products/services that the The Company produces and supplies primary fuels Company manufactures/provides including (but not limited to): (as in balance sheet) a. High Speed Diesel (HSD) b. Motor Spirit (Petrol) c. Liquefied Petroleum Gas (LPG)
126 Bharat Petroleum Corporation Limited 9. Total number of locations where business activity is undertaken by the Company i. Number of International Locations (Provide BPCL does not undertake any direct operations at details of major 5) its international locations. Only the subsidiaries have overseas operations.
ii. Number of National Locations as on a. Refineries: 2 (Mumbai and Kochi) 31.3.2020 b. Retail (Installations/Depots/TOPs): 76 c. LPG Bottling Plants: 52 (2 are in refineries and 50 in other locations) d. Lube Plants: 5 e. Aviation Locations/Fueling Stations/on-wheels: 58 f. Head Office: 1 g. Regional Offices: 4 10. Markets served by the Company – Local/State/ Local, State, National, International National/International Section B: Financial Details of the Company 1. Paid up Capital (INR) ` 1,966.88 Crores 2. Total Turnover (INR) ` 3,27,580.78 Crores 3. Total profit after taxes (INR) ` 2,683.19 Crores 4. Total Spending on Corporate Social Responsibility In line with the Companies Act, 2013 and the Companies (CSR) as percentage of profit after tax (%) (Corporate Social Responsibility Policy) Rules, 2014 BPCL has earmarked 2% of its average net profit amounting to ` 198.98 Crores. In addition, BPCL had a carry forward of ` 172.25 Crores as unspent for the previous year. BPCL has spent ` 345.57 Crores during the year 2019-20. 5. List of activities in which expenditure in 4 above BPCL’s CSR activities are carried out in the following has been incurred focus areas: • Education • Water Conservation • Skill Development • Health & Hygiene • Community Development Section C: Other Details 1. Does the Company have any Subsidiary Yes, the Group has twelve subsidiaries. Six are Indian Company/ Companies? and six are foreign subsidiaries. The list is as follows: Indian: • Numaligarh Refinery Ltd.(NRL) • Bharat PetroResources Ltd.(BPRL) • Bharat PetroResources JPDA Ltd. [Domestic Subsidiary of BPRL] • Bharat Gas Resources Ltd. (BGRL) • Bharat Oman Refineries Ltd.(BORL) • BPCL-KIAL Fuel Farm Pvt. Ltd.
Annual Report 2019-20 127 Foreign: • BPRL International B.V. (The Netherlands) [Overseas Subsidiary of BPRL] • BPRL Ventures B.V. (The Netherlands) [Overseas Subsidiary of BPRL] • BPRL Ventures Mozambique B.V. (The Netherlands) [Overseas Subsidiary of BPRL] • BPRL Ventures Indonesia B.V. (The Netherlands) [Overseas Subsidiary of BPRL] • BPRL International Singapore Pte. Ltd. (Singapore) [Overseas Subsidiary of BPRL] • BPRL International Ventures BV (the Netherlands) [Overseas Subsidiary of BPRL] 2. Do the Subsidiary Company/Companies No. The Subsidiary Companies do not participate in the participate in the BR Initiatives of the parent Business Responsibility initiative of the parent Company. company? If yes, then indicate the number of They operate in different geographies/ business domains such Subsidiary Company(s) and are driven by their own policies. 3. Do any other entity/entities (e.g. suppliers, No other entity/ entities are engaged with the Company’s distributors etc.) that the Company does business business, participate in the BR initiatives. However, with, participate in the BR initiatives of the during the selection/ registration of the suppliers, Company? If yes, then indicate the percentage contractors, dealers and distributors, BPCL conducts of such entity/entities? [Less than 30%, 30-60%, scrutiny with respect to certain parameters of National More than 60%] Voluntary Guidelines principles. Section D: BR Information 1. Details of Director/Directors responsible for BR BPCL has a Sustainable Development Committee for periodic review, discussions and guidance on various Sustainable Development initiatives and measures for implementation of Business Responsibility policies.
a) Details of the Director responsible for implementation of the BR policy/policies The details of the Committee members as on 31/03/2020 are given below: DIN Number Name Designation 08511473 Shri Harshadkumar P. Shah Chairman of the Committee 06646894 Shri Arun Kumar Singh Director (Marketing) 07049995 Shri R. Ramachandran Director (Refineries) b) Details of the BR head Particulars Details DIN Number (if applicable) NA Name Smt. V. Kala Designation Company Secretary Telephone number 022- 2271 3440 e-mail ID [email protected]
128 Bharat Petroleum Corporation Limited 2. Principle-wise (as per NVGs) BR Policy/Policies (Reply in Y/N) The 9 principles outlined in the National Voluntary Guidelines are as follows: P1 Business should conduct and govern themselves with Ethics, Transparency and Accountability P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle P3 Businesses should promote the well-being of all employees P4 Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized P5 Businesses should respect and promote human rights P6 Businesses should respect, protect and make efforts to restore the environment P7 Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner P8 Businesses should support inclusive growth and equitable development P9 Businesses should engage with and provide value to their customers and consumers in a responsible manner S. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 No. 1 Do you have a policy/ policies for… Y Y Y Y Y Y Y Y Y P1: Code of Conduct and Whistle blower P2: HSE and Sustainable Development policy P3: Internal HR policies P4: Sustainable Development policy P5: Internal HR policies P6: HSE and Sustainable Development policy P7: Sustainable Development policy P8: CSR policy P9: Citizen charter 2 Has the policy been formulated in consultation Y Y Y Y Y Y Y Y Y with the relevant stakeholders? 3 Does the policy conform to any national / Y Y Y Y Y Y Y Y Y international standards? If yes, specify Various policies at BPCL conform to different applicable statutes/ guidelines/ rules etc. issued by GOI and updated from time to time. Industry practices, national/ international standards are kept in view while formulating polices. 4 Has the policy been approved by the Board? Y Y Y Y Y Y Y Y Y If yes, has it been signed by MD/owner/CEO/ appropriate Board Director? Different policies are approved by Board/ Competent Authorities as per delegation of power 5 Does the Company have a specified committee Y Y Y Y Y Y Y Y Y of the Board/ Director/Official to oversee the implementation of the policy? 6 Indicate the link for the policy to be viewed Refer table below @ online
Annual Report 2019-20 129 S. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 No. 7 Has the policy been formally communicated to Y Y Y Y Y Y Y Y Y all relevant internal and external stakeholders? 8 Does the Company have an in-house structure Y Y Y Y Y Y Y Y Y to implement the policy/policies? 9 Does the Company have a grievance redressal Y Y Y Y Y Y Y Y Y mechanism related to the policy/policies to address stakeholders’ grievances related to the policy/policies? 10 Has the Company carried out an independent Y Y Y Y Y Y Y Y Y audit/evaluation of the working of this policy by an internal or external agency? @ Web-link for the policy:
NVG Principle Web-link Principle 1: Ethics, transparency& https://www.bharatpetroleum.com/images/files/CodeOfConduct_ accountability BPCL.pdf Principle 2: Sustainability in life-cycle https://www.bharatpetroleum.com/sustainability/health-safety- of product security-and-environment/policies/security-policy.aspx Principle 3: Employee well-being Company’s Internal web (Intralink) Principle 4: Stakeholder engagement https://www.bharatpetroleum.com/sustainability/health-safety- security-and-environment/policies/security-policy.aspx Principle 5: Promotion of human rights http://www.bharatpetroleum.com/PDF/Citizen_Charter.pdf Principle 6: Environmental protection https://www.bharatpetroleum.com/sustainability/health-safety- security-and-environment/policies/security-policy.aspx Principle 7: Responsible public policy https://www.bharatpetroleum.com/sustainability/health-safety- advocacy security-and-environment/policies/security-policy.aspx Principle 8: Inclusive growth https://www.bharatpetroleum.com/social-responsibility/corporate- social-responsibility/vision-and-policy.aspx Principle 9: Customer value http://www.bharatpetroleum.com/PDF/Citizen_Charter.pdf 2A. If answer to S. No. 1 against any principle, is ‘No’, the reasons for the same have also been mentioned therein.
S. Question P1 P2 P3 P4 P5 P6 P7 P8 P9 No 1 The Company has not understood the Principles 2 The Company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles Not Applicable 3 The Company does not have financial or manpower resources available for the task 4 It is planned to be done within next 6 months 5 It is planned to be done within the next 1 year 6 Any other reason (please specify)
130 Bharat Petroleum Corporation Limited 3. Governance Related to BR During the financial year 2019-20, 5 investor complaints have been received through SEBI and 1. Indicate the frequency with which the Board of NSE (SEBI-2 and NSE-3) which were all attended Directors, Committee of the Board or CEO assess to and resolved on priority basis. the BR performance of the Company - Within 3 months, 3-6 months, Annually, More than 1 year. BPCL has received 8 complaints before the panel of independent external monitors for joint deliberation BPCL has constituted a ‘Sustainable Development and recommendations which were resolved Committee of the Board’ which reviews the sustainability initiatives every 3-6 months and satisfactorily. provides directions for further improvement. There were 37 fresh complaints received by the 2. Does the Company publish a BR or a Sustainability vigilance department during the year. A total of Report? What is the hyperlink for viewing this 35 complaints were disposed this year leaving a report? How frequently it is published? balance of 59 complaints. Yes; BPCL has been publishing its BRR as a part of There were 12 grievances received by Employee its Annual Report. In addition, BPCL also publishes Satisfaction Enhancement Department from its GRI Framework based Sustainable Development employees and all were resolved satisfactorily Report (SDR) every year since FY 2006-07. The within the year. Sustainable Development Report for the past years Principle 2: Sustainability in the life-cycle of are available at: https://www.bharatpetroleum.in/ the Product Sustainability/Sustainability-Reports.aspx 1. List up to 3 of your products or services whose Section E: Principle-wise Performance design has incorporated social or environmental Principle 1: Ethics, Transparency and concerns, risks and/or opportunities. Accountability BPCL has been constantly investing its efforts in 1. Does the policy relating to ethics, bribery and ensuring that the usage of products is done in a safe corruption cover only the Company? Yes/No. and efficient manner. BPCL ensures that they do Does it extend to the Group/Joint Ventures/ not pose any unintended harm to the environment Suppliers/Contractors/NGOs/Others? and persons involved during their production, transportation, consumption or disposal. The Yes. The policy formulated by BPCL on ethics, major products are: prevention of corruption and bribery covers its entire operations. BPCL’s Group Companies/Joint 1. BS IV Motor Spirit Ventures are separate legal entities having their • 10% Ethanol Blended Motor Spirit own policies and procedures and are not covered by BPCL’s policy on ethics, bribery, corruption and 2. BS IV HSD human rights. • 7 % Bio Diesel Blended 2. How many stakeholder complaints have been 3. LPG received in the past financial year and what percentage was satisfactorily resolved by the 2. For each such product, provide the following management? If so, provide the details thereof, details in respect of resource use (energy, water, in about 50 words or so. raw material etc.) per unit of product (optional): BPCL has in place a robust and easily accessible i. Reduction during sourcing/production/ Customer Care System (CCS) enabling distribution achieved since the previous customers to provide their feedback, complaints year throughout the value chain? or suggestions. During the year 2019-20, a total ii. Reduction during usage by consumers of 13,02,472 Customer Complaints have been (energy, water) has been achieved since received and 13,02,401 are resolved, which is the previous year? 99.99% with an average closure time of one day. Balance complaints are being addressed a. BPCL Mumbai Refinery has processed subsequently and closed satisfactorily. 15,016.7 TMT of Crude Oil and MBN
Annual Report 2019-20 131 achieved was 62.5 in the year 2019-20, BPCL has also commenced to set up a biofuel as against processing of 14,772.7 TMT of refinery to produce Second Generation Ethanol Crude Oil and MBN achieved was 64.5 in at Bargarh. This will help in meeting the current the year 2018-19. There was a reduction requirement of EBMS and contribute towards a of 3.1% of specific energy consumption cleaner environment and sustainable future. (MBN). BPCL has undertaken the blending of 7% Biodiesel b. There was a decrease of 8.5% in the fresh in HSD at selected locations, as per national water consumption for Mumbai Refinery due policy of Biofuel. Biodiesel substantially reduces to recycling of water for the year 2019-20. unburnt Hydrocarbons, CO and Particulate Matter. Biodiesel is manufactured from non-edible/edible c. BPCL Kochi Refinery has processed oils and has almost no sulphur, no aromatics and 16,515.4 TMT of Crude Oil and MBN approximately 10% built in oxygen which helps achieved was 68.5 in the year 2019-20, in ensuring complete combustion. BPCL blended as against processing of 16,050.7 TMT of 12,553 KL of Biodiesel (B 100) in 152,112 KL of Crude Oil and MBN achieved was 71.5 in the diesel. The Biodiesel blending ratio during the year year 2018-19. There was a reduction of 4 % 2019-20 was 0.05 %. of specific energy consumption (MBN). Under the National Policy on Biofuels-2018, Used d. There was decrease of 20.4 % in the fresh Cooking Oil (UCO) has been identified as a potential water consumption for Kochi Refinery due to feedstock for Biodiesel production. The Food recycling of water for the year 2019-20. Safety and Standards Authority of India (FSSAI) in July 2018 has launched Repurpose Used Cooking BPCL ensures that they do not pose any unintended Oil (RUCO) - an ecosystem to enable the collection harm to the environment and to the persons and conversion of used cooking oil to Biodiesel. On involved during their production, transportation, World Biofuel Day-2019, Oil Marketing Companies consumption or disposal. The refinery processes floated the first Expression of Interest (EoI) for are certified by ISO Standards i.e. ISO 9001, ISO inviting entrepreneurs to come forward and set-up 14001, ISO 45001 and ISO 50001 for Quality, exclusive facilities to collect UCO from the market Environment, Occupational Safety and Energy. and convert it to Biodiesel. As of now, 8 EoIs have BPCL refineries have successfully adhered to been floated and the status of BPCL is as under: National Auto Fuel norms by producing and OMC No. of No. of Proposed Letter supplying Bharat VI fuels to the market six months Offers Proposed Capacity of Intent prior to the assigned timeline. Mumbai Refinery Received Biodiesel (TPD) Issued has commissioned a Gasoline Treatment Unit Plants (No’s) (GTU) to produce BS-VI grade MS. Kochi Refinery BPCL 6 8 196 1 brought down the Sulphur levels in auto fuels to 3. Does the Company have procedures in place for meet BS-VI specifications by replacing the catalyst sustainable sourcing (including transportation)? in its hydro-treating units. BPCL MR and KR were If yes, what percentage of your inputs was ready with BS-VI grade (MS/ HSD) since Oct-2019, sourced sustainably? Also, provide details as per Govt. mandate and effected supplies to the thereof, in about 50 words or so. nation w.e.f. 1st April, 2020. Yes. BPCL is extensively using its pipeline In line with MoP&NG Gazette Notification for network for the transportation and distribution of selling of Ethanol Blended Motor Spirit (EBMS) its products. Cross-country pipelines are globally with Ethanol up to 10%, BPCL has undertaken recognized as the safest, cost-effective, energy- maximization of blending of Ethanol in Motor Spirit efficient and environment-friendly mode for which helped to reduce harmful emissions such as transportation of crude oil and petroleum products. carbon monoxide. In the year 2019-20, BPCL has BPCL has 2,241 kms of pipelines which have blended 4,57,207 KL Ethanol in 45,62,187 KL of transported 16.99 MMT of petroleum products as EBMS. The total MS sold by BPCL was 109,58,249 compared to 15.34 MMT last year, which is an KL and the Ethanol blending ratio during the year increase of 10.7 % more of petroleum products, 2019-20 was 4.2%. thus reducing emissions.
132 Bharat Petroleum Corporation Limited Further Pipelines are using a “Drag Reducing Yes. BPCL has taken various measures for the Agent” at Mumbai & Wadala, which has helped in procurement of Goods and Services from small/ achieving a flow rate more than the design capacity local vendors. BPCL tenders include provisions and increased the transported quantity from the regarding Purchase Preference clauses for Micro same line. and Small Enterprises (MSEs). The Company meets its crude oil requirement BPCL has been fully abiding by the Public through annual term contracts and spot contracts. Procurement Policy for MSEs order 2012 and its BPCL has diversified its Global Crude Oil supply amendment of November 2018 and more than 25% from various sources and efforts are made for of its annual Goods and Service procurements are optimization of the crude basket, to minimize done through MSEs as against a target of 25%. The inventories while ensuring uninterrupted supplies General Conditions of Contract (GCC) and General of Crude Oil to Refineries. BPCL also attempts Purchase Conditions (GPC) of press tenders have to employ Very Large Crude Carriers (VLCC) for the Purchase Preference clause for MSEs. transportation of Crude Oil, to the extent possible, so as to save transportation cost and carbon The total procurement value for BPCL for Goods footprint. BPCL has transported approx. 12.54 and Services, excluding Works Contracts, where MMT of Crude Oil through pipeline and VLCC, which MSEs could have participated was ` 8,754.81 is approx. equivalent to 54 % through sustainable Crores and the actual procurement value from methods. Besides 2.54 MMT of LPG import has MSEs was ` 2,585.36 Crores, i.e. an achievement been done through VLCC, which is equivalent to of 29.53 % which is more than the target of 25% 65% of the total requirement. for the year 2019-20. BPCL has set-up a dedicated BPCL R&D has developed biodegradable hydraulic MSE cell consisting of 7 staff to ensure timely oils, metal working fluids and base fluids for payments to vendors. The procurement for Goods oil base drilling muds. In most of the hydraulic and Services excluding Works Contracts from systems, during operation, leakage through hose MSE-SC/ST Entrepreneurs during the year 2019- pipes and spillage occurs very frequently; hence 20 was ` 106.6 Crores as compared to ` 133.10 these lubricants will prevent any damage to the Crores last year. environment. Similarly, most of the metal working The procurement through Government e-Market used in industry will last only for a few months, Place (GeM) i.e. online procurement portal started after which they need to be completely replaced. by GOI during the year 2019-20 was ` 16 Crores, Disposal of mineral base metal working fluids up from ` 1 Crore procured in the previous year. involves a huge cost towards treatment; hence biodegradable cutting fluids were developed by BPCL is continuously developing / encouraging BPCL R&D, which will not pose any risk during MSE vendors. Our vendor base over the last three disposal. Biodegradable drilling base fluid has been years has increased from 3900 to 6200 and our developed by R&D to protect the environment as sourcing from MSEs has increased by 60% during a large volume of drilling fluids used in onshore / the same period. offshore oil exploration enter into the soil or sea CPO (M) also coordinated activity for enrolling water and damage the environment. MSE vendors in the Trades Receivable Discounting BPCL had been using DCP / CO2 as fire-fighting aid Scheme (TReDS) program. This facility was availed for electrical fires. BPCL has now started using a by MSE vendors and over 1940 invoices valued at retrofitted fire suppression system which is fitted ` 102 Crores were discounted in the year 2019-20. in the electrical panels. The product used is clean agent and it works on detection of heat and flame. BPCL participated in a “National Vendor 4. Has the Company taken any steps to procure Development Program for SC/ST Entrepreneurs ‘’ goods and services from local and small organized by Dalit Indian Chambers of Commerce producers, including communities surrounding and Industry (DICCI)and National SC/ST Hub on th their place of work? 13 January, 2020. The program was inaugurated by the Hon’ble Minister of Petroleum & Natural Gas If yes, what steps have been taken to improve & Steel, Shri. Dharmendra Pradhan. A presentation their capacity and capability of local and small was made by BPCL, highlighting the existing vendors? MSE policy for SC/ST and suggestions in policy
Annual Report 2019-20 133 for improvement in procurement from SC/ST, to BPCL MR has a state-of-the-art ETP which over 1000 SC/ST vendors and dignitaries from comprises PACT (Powdered Activated Carbon the MSME Ministry, National SC/ST Hub, National Treatment) and WAR (Wet Air Regeneration) Small Industries Corp. (NSIC) and officials from Oil technology resulting in no sludge generation. PSEs and Steel PSEs. BPCL has collaborated with M/s. RCF for a joint STP BPCL, in association with MSME Development at RCF with a capacity of 22.75 MLD of municipal Institute and NSIC SC/ST Hub Office at MSME- DI, sewage that has been fully constructed and Chennai organized a special Vendor Development installed by RCF for producing 15 MLD of treated Program with an objective to enlist new vendors water (BPCL has a share of 6 MLD & RCF share 9 and enhance procurement from MSME SC/ST MLD). BPCL MR started receiving approximately 6 Vendors. Over 120 vendors were present for the MLD of sewage treated water since Dec’19. A total program during which Udyog Aadhar Registration of 801 TKL sewage treated water ex RCF has been (UAN) kiosks (for prospective vendors) and Vendor received in the CCR cooling tower in the year 2019- Registration Kiosks were set up. The program 20. This project is playing a vital role to recycle included informative and interactive sessions from waste water and establish redundancy for process officials of MSME-DI and NSIC SC/ST Hub, who water to sustain refinery operations. This initiative explained in detail the Public Procurement Policy of BPCL MR has reduced the dependency on water and various Government schemes for MSME SC/ from Brihanmumbai Municipal Corporation (BMC) ST vendors and Entrepreneurs. The E-tendering by 35%. process was explained by a consultant of NSIC SC/ Flare Recovery facility recovers gases, thus ST Hub, Chennai. The vendor registration process reducing hydrocarbon losses and minimizing in BPCL was also presented. emissions. In 2019-20, the total flare gas recovered A “Premier Vendor Workshop” organized by CPO was 2192 MT in MR and 2944 MT in KR, which (Marketing) and CPO (Refineries) was held during was subsequently treated and again used as fuel November 2019 wherein Dy. Director, MSME-DI, gas in process furnaces. Mumbai made a detailed presentation to over 100 BPCL MR has a biogas plant of 85 m3 capacity, vendors. whereas KR has one of 90–100 m3 capacity. The 3 5. Does the Company have a mechanism to generation capacity of biogas is 0.09 m per kg recycle products and waste? If yes, what is the in MR and the same in KR from kitchen waste. It percentage of recycling of products and waste helped in replacing 40 kg of LPG per day. Besides, (separately as <5%, 5-10%, >10%). Also, the slurry is used as a manure to assist in plant provide details thereof, in about 50 words or so. growth. The total bio gas generated from the biogas plant was 5548 m3 by MR and approx. 5000 m3 by BPCL has been constantly exploring the possibility KR in the year 2019-20 and the same was used for of recycling waste material generated from cooking in our canteens. operations. BPCL refineries have a system for BPCL KR has entered into a contract with Co- recovery of oil from crude oil sludge as and when Processors for disposal of spent charcoal. This generated during crude tank M&I (maintenance philosophy will be extended to other wastes in a and inspection) activities. The oil removed sludge phased manner. Disposal through Co-Processors is treated with a Bio-remediation process using oil is the sustainable method by which KR will do zapper bacteria to bring down the oil content in disposal of waste in future. sludge to less than 0.5 % wt. BPCL MR has also taken the initiative to use enzyme based additive All organic waste is converted to compost in all which expedites the process of Bio-remediation to marketing Business Units for sustainable disposal water mixed oily sludge. of waste. Approx. 350 tons of organic waste was converted to compost in the year 2019-20. In FY 2019-20, total oil recovered from crude sludge was 28.34 % wt. from MR and 37.7 % wt. from 32% reduction of sulphur in gasoline has been KR. Oil catchers provided in the Refinery help in the achieved with 10% Gasoline Sulphur Reduction recovery of oil. BPCL has Effluent Treatment Plants catalyst developed using in-house technology by (ETP) at its refineries and marketing locations to our Corporate Research & Development Centre, treat and reuse the treated waste water. Noida. The usage of Bharat GSR Catalyst has
134 Bharat Petroleum Corporation Limited resulted in significant savings of ` 25.2 Crores sexual harassment in the last financial year and during the year. pending, as at the end of the financial year.
HR Western Region has taken the initiative of sending S. Category No. of No. of waste paper for recycling and accumulating green No. complaints complaints points which can be exchanged in lieu of paper, filed during pending as at note books and envelopes. Approx. 10 tonnes the financial the end of the paper has been sent for recycling. Other regions year financial year are also exploring to replicate the same soon. 1. Child labour/ NIL NA Principle 3: Employee Well Being forced labour/ involuntary 1. Please indicate the total number of employees. labour Total number of permanent employees is 11,249 2. Sexual 7 2 (as on 31.3.2020) harassment 3. Discriminatory NIL NA 2. Please indicate the total number of employees employment hired on temporary/contractual/casual basis. 8. What percentage of your undermentioned The total number of contract labour engaged in employees were given safety and skill # BPCL is 28,923 (approximately 58% Contract upgradation training in the last year? Labour in Non-Project and 42% in Project contracts) Permanent On an average, 26.56 training hours, # Contract labourers are engaged by contractors Employees functional as well as behavioural for non-core, sporadic and peripheral nature of training, were provided per employee jobs as per “Contract for Services”. The number is in the reporting period. This training is inclusive of safety related training. dynamic and varies depending on projects/works being undertaken. No casual labour is currently Permanent On an average, 23.06 training hours, engaged in BPCL. Women functional as well as behavioural Employees training, were provided per woman 3. Please indicate the number of permanent women employee in the reporting period. This employees. training is inclusive of safety related The total number of permanent women employees training. is 1,040 [Management - 586, Clerical - 437, Casual/ While we do not separately track the Labour - 17] Temporary/ proportion of contract labour that Contractual were given safety & skill upgradation 4. Please indicate the number of permanent Employees training, their safety is of utmost employees with disabilities importance. Across various locations The number of permanent employees with and especially within the Refineries, disabilities is 237 [Management - 115, Clerical - the contract labour mandatorily attend 49, Labour - 73] a comprehensive training programme which includes sessions on ‘Safety 5. Do you have an employee association that is within the workplace’ without which recognized by management? they are not provided access cards. There are 20 registered Trade Unions operating in Employees System being developed for tracking BPCL. with Disabilities the details. 6. What percentage of your permanent employees 100% employees and contract labour were given safety are members of this recognized employee training. 1072 capacity building safety programs were association? conducted at locations across Business Units and 12,913 Approx. 94% of our (Non-Management) employees participants were trained in the year 2019-20 which is are represented through these Trade Unions. equivalent to approx. 51,652 hrs. 7. Please indicate the number of complaints relating The training given on functional and behavioural aspects to child labour, forced labour, involuntary labour, to all the employees were 2,98,817 hrs for the year
Annual Report 2019-20 135 2019-20, as compared to 2,33,218 hrs in the year 2018- Pradesh, has transformed the way in which early- 19, which is more than 28% increase. The total training age education is perceived and imparted. More hrs provided to female employees were 23,977 hrs as than 84,000 children have been directly benefitted compared to 17,798, which is 34 % more than last year. under this program this year. Principle 4: Stakeholder Engagement Another such program in education sector is the ‘Computer Aided Learning’ (CAL) program which 1. Has the Company mapped its internal and aims at providing a level-playing field to children external stakeholders? Yes/No from economically disadvantaged communities BPCL has identified both, its internal and external by helping in bridging the gap of digital literacy stakeholders. The internal stakeholders largely between them and the society at large.
include employees, investors and shareholders, th while the external stakeholders are listed as follows: This year, we have continued with the 7 batch of our flagship Teacher Training Program– Saksham. • Government and regulatory authorities This project has prepared over 320 primary and • Industry associations upper primary teachers and headmasters from 70 • Customers schools for the evolving education paradigm by • Suppliers imparting them with knowledge on new techniques • Community for teaching and classroom management • Dealers and distributors • Contractors We have also widely covered the infrastructural • Media and academic institutions facet of education. One such project is carried out in Darrang which is an aspirational district situated 2. Out of the above, has the Company identified in the central part of Assam. Eighty additional the disadvantaged, vulnerable & marginalized classrooms with allied facilities in identified 30 stakeholders? Government Primary Schools are being constructed Yes. BPCL as a responsible organization cares for the which would facilitate an advantageous & safe community. BPCL has identified the disadvantaged, learning atmosphere for over 10,000 students vulnerable & marginalized stakeholders and including both boys and girls. adopted a holistic approach for their socio- A new hostel block with 165 rooms for women was economic development through CSR activities. constructed at the Indian Institute of Science (IISc), Our projects aim at benefitting communities who Bengaluru where some of the brightest women are around our business units like the refineries, students and researchers from disadvantaged depots, installations, LPG bottling plants and are sections of the community, backward regions and identified as vulnerable/ underprivileged. Also far-flung areas across India are admitted. remote rural/ tribal communities are under the ambit of the marginalized and vulnerable. Furthermore, B. SKILL DEVELOPMENT we have projects solely targeted at improving the Aligning with our Hon’ble Prime Minister’s ‘Skill quality of life of persons with disabilities, who are India Campaign’, BPCL along with other oil highly marginalized and disadvantaged. companies has promoted a Skill Development 3. Are there any special initiatives taken by the Institute (SDI) at Kochi to provide vocational Company to engage with the disadvantaged, training to youth and enhance their employability / vulnerable and marginalized stakeholders? If so, entrepreneurship for the deserving youth both in Oil provide details thereof. & Gas Industry as well as in other Industries. Yes. Details are given below This state of art campus with all latest gadgets and equipment’s provides the right ambience for A. EDUCATION skilling 180 youth at a time on a fully residential Firm in the belief that children are the leaders model for total of 1248 training hours spread of the future, BPCL continues its commitment across six months. Industrial Electrician, Welding, to education as one of our core areas of focus Fitter- Fabrication, Process instrumentation are under CSR. Project Akshar, being undertaken at some of the courses conducted at SDI, Kochi with Nandurbar in Maharashtra and Sagar in Madhya M/s Nettur Technical Training Foundation (NTTF),
136 Bharat Petroleum Corporation Limited Bangalore as the training partner. SDI Kochi has so towards holistic treatment cost in six cancer far trained and certified 755 students in 6 batches, hospitals across the country. since its inception in Dec 2016. SDI Kochi has Lifeline express “Hospital on a train” has contributed excellent placement track record having placed in reducing the burden of avoidable disability in rural 95% of certified students in leading companies in communities by early identification, screening and India and abroad. providing medical & surgical interventions to about Continuing our support to the neglected sections 20000 patients in the districts of Araria (Bihar), of society, we have supported placement-linked Dhubri (Assam) and Papum Pare (Arunachal Vocational Training project for assimilating 792 Pradesh). leprosy-affected youth into mainstream society. Paving the way for a healthy life, several Mobile With a variety of technical and non-formal courses Medical Units were supported, which catered offered at these Vocational Training Centres, largely to marginalized sections of society for aspirants can choose to obtain qualification in providing aids & appliances, cataract surgeries trades such as motor mechanic, diesel mechanic, or towards strengthening the health facilities by welder, computer operator and programming supporting procurement of medical equipment or assistant, stenographer, electrician, carpenter, through construction of additional facilities etc. tailor among others. This year has seen one of the most challenging C. WATER CONSERVATION global health crises by way of the COVID-19 Water being one of the most essential elements pandemic and BPCL has been right there on for living, it has been one of the ongoing areas of the front-line, be it through setting up ICUs for focus for BPCL both within and beyond the fence. treating COVID- 19 patients, providing of Personal The Corporation has taken up rejuvenation of Protective Equipment (PPE) kits to Health workers, urban water bodies as well as cleaning of semi- distribution of sanitizers, face masks to the general urban/rural water structures through a balanced public as well as making available basic provisions combination of direct intervention, involvement of to those in need. Along with the entire oil and gas local government, ‘Shramdaan’ and community industry, BPCL has contributed in a big way to the engagement. PM CARES Fund for the relief and rehabilitation measures as a result of the COVID-19 outbreak. In an effort to re-establish ecological balance and biodiversity, we undertook the cleaning of a 10km The Corporation enthusiastically participated in stretch of the Ichamati river in Bengal along with ‘Swachh Bharat Abhiyan’, the flagship movement the local administration of three panchayats. This of Government of India and received top honours initiative will help to re-open the scope for fishing, from MOP&NG for an outstanding performance water for cultivation, production of organic manure during the Pakhwada in July. As part of the various from the vegetation removed from the river. Swachhta Pakhwadas, BPCL undertook more than 80,000 activities within a narrow timespan of two D. HEALTH & HYGIENE months combined with a total outreach of more BPCL continues to contribute to the well-being than 10 lakhs people through various awareness of the country by reaching out to marginalised initiatives. communities through the adoption of several BPCL constructed over 1400 toilets during the year quality health care initiatives that include both which include community sanitation complexes, preventive and curative interventions. Our cancer Individual Household toilets and School Sanitation care project in Darrang, an Aspirational District, Complexes. The company undertook a bold entails the setting up of an affordable cancer care step towards eliminating manual scavenging by facility and ensuring access to cancer care, leading providing robotic manhole cleaning machines to to early diagnosis and timely treatment that helps in M-Ward in Mumbai, Maharashtra. The Corporation improved survival rates among patients. has also continued in its support of Swachh Iconic With focus on Cancer cure, one of our major Places projects in Kalady, Kerala, the birth place ongoing project has been to support more than 450 of Shri Adi Sankaracharya and Meenakshi Amman underprivileged and low income cancer patients Temple at Madurai, Tamil Nadu.
Annual Report 2019-20 137 E. COMMUNITY DEVELOPMENT Principle 6: Environmental Protection BPCL has continued to support a mega project 1. Does the policy related to Principle 6 cover of integrated development of communities in the only the Company or extends to the Group/Joint district of Gadchiroli situated in the south-eastern Ventures/Suppliers/Contractors/NGOs/others? corner of Maharashtra which includes interventions The applicability of the Environmental Protection on water harvesting, safe drinking water, sustainable Policy is limited only to the operations in BPCL. livelihood program, establishment of libraries, The Group Companies and Joint Ventures have central kitchen, treating anaemic adolescent girls their own environmental policies. by providing fortified rice etc. BPCL has participated in the “Transformation 2. Does the Company have strategies/ initiatives of Aspirational Districts Program”, where work to address global environmental issues such as has been done in various sectors such as skill climate change, global warming, etc.? Yes/No. If development, community development along with yes, please give hyperlink for webpage etc. special focus on healthcare, nutrition and school Yes. BPCL has a Board level Sustainable education. BPCL has also spread its coverage in Development Committee which discusses and the north-east sector by initiating projects in the reviews projects on Sustainable Development on a interior and difficult terrains of Meghalaya, Mizoram half yearly basis. and Manipur. BPCL has recognized the need to join hands and Principle 5: Promotion of Human Rights act against the consequences of climate change BPCL believes in equal opportunity for its employees and partnered with Ministry of Petroleum & Natural and ensures there is no discrimination on the basis of Gas, Ministry of Environment Forests & Climate caste, tribe, religion or region in extending the various Change and other Oil Companies on the Campaign welfare facilities to take care of employees’ health, on Climate Change. On an Industry basis, the study efficiency, financial well-being, social status, satisfaction, on climate change was carried out by TERI, who employment, growth, remuneration or development, etc. suggested short and long terms actions to be BPCL’s vendor contracts have explicitly expressed terms undertaken by Industry. BPCL has already initiated and conditions (under General Conditions of Contract) actions like undertaking Flood modeling study at for the vendors and for engagements from a human KR, Water Stress Study is completed at MR and rights perspective. Though the terms and conditions of KR and suggestions are under implementation, engagement between the contractor and the labour are Reduction in Green House Gases (GHG) emission governed by the respective contract, BPCL, being the is already under progress by various initiatives of principal employer, ensures that there is proper adherence SD projects etc. to the provisions of the EPF & MP Act, 1952/ESI Act 1948 The strategy of BPCL is to lay emphasis on the covering social security aspects like PF, ESI etc. All the usage of renewable energy, in order to face the contractual labour engaged are governed by the Contract challenges of climate change. BPCL refineries and Labour (Regulation and Abolition) Act, 1970. marketing locations are doing regular accounting of 1. Does the policy of the Company on human rights GHG emissions and water consumption. BPCL has cover only the Company or extends to the Group/ taken various initiatives at its operating locations to Joint Ventures/ Suppliers/Contractors/NGOs/ make the processes energy efficient, which would Others? result in reduction of GHG emissions and assist in minimizing its contribution to global warming. BPCL’s Human Rights policy only covers the BPCL MR and KR have upgraded their facilities to operations controlled by the Company. It does not produce BS-VI grade of MS and HSD which has extend to its Group / Joint Ventures etc. brought down sulphur in diesel and MS to less than 2. How many stakeholder complaints have been 10 PPM and effected supplies from 1st April, 2020. received in the past financial year and what Both Refineries and Marketing locations have percent was satisfactorily resolved by the carried out a study on GHG emissions and Carbon management? Sequestration through trees which are available at During FY 2019-20, no complaint with respect to locations. The purpose of such a study was to make Human Rights was received by BPCL. a GHG emission inventory and find the methods to
138 Bharat Petroleum Corporation Limited reduce emissions and make the location carbon of all incidents and mitigation measures thereof. neutral. We have increased our CO2 sink with trees Mumbai Refinery has taken a new initiative in more than 7800 MT CO2e this year. implementing “Behavior Based Safety” (BBS) The energy conservation initiatives implemented whereas Kochi Refinery has implemented Process by refineries resulted in reduction of the specific Safety Management (PSM) principles to further energy consumption, meeting the PAT targets and improve the overall safety culture. assisted in reduction of carbon emissions. BPCL Both Refineries and Marketing locations have R&D is engaged in developing new technologies to taken a target to conduct environmental audits as improve fuel efficiency and address environmental stipulated by OISD 212 to assess the environmental issues. The ‘Real-time Monitoring & Optimization risks and possible solutions. of Crude Distillation Units’, a proprietary method 4. Does the Company have any project related to using BPMARRK® is one such technology. It is Clean Development Mechanism? If yes, whether an intelligent device for predicting the crude oil any environmental compliance report is filed? characteristics i.e. TBP distillation, yields (wt. % & vol %) and distillate properties. Presently, BPCL does not have any project under the Clean Development Mechanism. BPCL publishes a Sustainability Report every year as per GRI guidelines highlighting Environmental, 5. Has the Company undertaken any other initiatives Social and Governance (ESG) performance of on – clean technology, energy efficiency, the Company which can be accessed at the renewable energy, etc.? Yes/No. If yes, please following link. give hyperlink for webpage etc. https://www.bharatpetroleum.in/Sustainability/ Yes. Bharat Petroleum believes that transition Sustainability-Reports.aspx. to clean energy alternatives will help to protect our environment. In FY 2019-20 the capacity of We also have targets on renewable energy which renewable energy has increased from 31.7 MW emphasizes increased use on solar/ wind power/ to 43.43 MW, which is an increase of 37%. The and energy efficient lights. capacity of energy efficient lighting has increased 3. Does the Company identify and assess potential from 12.66 MW to 17.95 MW, which is an increase environmental risks? Yes/No of 41%. These initiatives on renewables have Yes. Environmental Risk and Safety being a primary resulted in an annual reduction of GHG emissions concern, BPCL has in place a detailed Health, of more than 104 TMT CO2e approx. Besides, the Safety and Environment Policy which emphasizes other initiatives i.e. distribution through Pipelines, on the use of appropriate technologies to minimize LPG under PMUY and Bio fuels has further reduced the impact of our activities on the environment. emissions by 1686 TMT CO2e. The total catchment BPCL Refineries and Marketing locations have been area under rainwater harvesting was increased certified for ISO 9001, ISO 14001, OHSAS-18001, from 7,78,939 Sqm. to 8,23,732 Sqm. during ISO 45001 and ISO 50001 i.e. Quality, Environment, FY 2019-20 to reduce the dependency on other Occupational Health & Safety and Energy. As part sources of water. of these ISO certifications, Risks & Opportunities BPCL Refineries and Marketing locations have are identified with mitigation strategy and a detailed undertaken several initiatives to conserve energy Hazard Identification and Risk Assessment (HIRA) by implementing projects in areas of clean and Aspect Impact (AI) has been prepared and technology, energy efficiency and renewable documented for all functions. energy. The following are major energy efficiency As a practice, BPCL conducts Environmental (saving) initiatives implemented during the year Impact Assessments (EIA) / Rapid Risk 2019-20: Assessment (RRA) / Quality Risk Assessment • BPCL MR has replaced 3505 conventional (QRA) at every grass root project or while installing light fittings with energy efficient LED lighting, a new facility to understand the impact created resulting in overall savings equivalent to by the commissioning / operation of facility and 83 MT of Oil Equivalent (MTOE). The cost identify methods to reduce environmental impact. incurred was ` 0.69 Crores. MR is the first An Incident Reporting and Information System refinery in India to convert 100% of the (IRIS) is in place in our refineries, capturing details conventional lights into LED lights. This
Annual Report 2019-20 139 initiative results in power saving of 9,840 of new strategies / ideas / improvements MWH per annum which corresponds to a for efficient monitoring and control of benefit of ` 9.6 Crores & reduction in CO2 environment parameters to sustain emission by 7,085 MT CO2e per annum. environment performance. As per this • Mumbai Refinery has installed 7 roof top initiative, an ‘Energy & Environment solar plants of combined capacity of 506 Champion’ & support person from the same KW to the existing capacity of 1002 KW, unit along with an E & E anchor has been taking the total generating capacity of solar nominated. Energy & Environment Champion power to 1508 KW. meetings are conducted every fortnight and reports are prepared for improving Encon & Steam tracing of FO supply headers to Environment aspects of BPCL MR. CDU 3, HCU, LOBS, CDU 4 & ARU replaced by electrical tracing resulted in MP steam • BPCL benchmarked its environmental savings of 40 TPD. The total savings of initiatives through M/s Confederation of ` 0.77 Crores/year with a project cost of Indian Industry (CII). BPCL MR achieved ` 4.5 Crores. a “Silver” Rating in the assessment for ‘Green Co’ by CII – Green Co Assessment • Turbine driven bearing cooling water pump Team and achieved the distinction of being in boiler-house was replaced with energy the “first Refinery” to be rated under Green efficient pump resulting in steam saving of 25 TPD and total savings of ` 3.06 Crores/ Co Rating Certification. This rating denotes year with a project cost of ` 0.18 Crores. performance beyond compliance. • Advanced Process Control Implementation • Installation of Benzene & Toluene analyzers was carried out in Diesel Hydro-treater Unit at Trombay Dispatch Unit gantry bay nos. to optimize the steam to product stripper. 1, 2, 3, 4 and Benzene vapour recovery This has resulted in MP steam savings of 29 unit vent have been completed. With the TPD and total savings of ` 1.78 Crores/year. help of these analyzers, Benzene & Toluene No project cost was incurred. concentration in the gantry area will be monitored on real time basis to strengthen • Steam was optimized in extraction Column of environment monitoring. Aromatic Recovery Unit which has reduced the overhead load and resulted in steam • The following are major energy efficiency saving of 22 TPD. Total savings were ` 1.49 (saving) initiatives implemented during FY Crores/year. No project cost was incurred. 2019-20 in Kochi Refinery: • The existing metallic blades of 28 AFCs in • Bypassing from the earlier two column CDU 4 were replaced with new generation operation to single column operation energy efficient FRP blades (i.e. New FRP in Naphtha Splitter Unit -1 (NSU-1), blades consume 20% less power). This resulted in steam saving of 9 (TPD) resulted in power savings of 97.14 kW and and an annual saving of ` 0.78 Crores. total savings of ` 0.36 Crores/year. • In CDU 2, stripping steam to CDU • Taking advantage of low RLNG spot prices, column was optimized which resulted Internal Liquid Fuel Oil consumption has in steam saving of 60 (TPD) and an been reduced from 490 TPD to 200 TPD and annual saving of ` 4.1 Crores. switching over to gas firing in furnaces during • In Crude Distillation Column-3 (CDU- Mar’20 to improve GRM and to minimize 3), crude column, vacuum column emissions. SOx emission has reduced to stripping steams and vacuum heater less than 5 TPD (earlier 9-10 TPD - against velocity steam were optimized permissible limit of 10.44 TPD) and CO2 which resulted in reduction in steam emission has been reduced by 430 TPD. consumption of around 120 (TPD) • E & E dept. rolled out an “Environment and an annual saving of ` 9.9 Crores. Champion” initiative to establish an • Redundant Variable Frequency Drives ‘Ownership’ approach among process (VFD) from Naphtha yard pumps teams and have seamless implementation (YP 65) have been installed in Diesel
140 Bharat Petroleum Corporation Limited Hydro Treater (DHT) product diesel • KR has installed high capacity trays in pump motors which resulted in power Low Pressure fuel gas Amine Absorber saving of 200 (KW) and an annual of Vacuum Gas Oil Hydro-treater saving of ` 1.1 Crores. Unit. The project was carried out at a cost of 0.35 Crores and a realizable • The steam turbine driven Wet Gas Compressor-2 was replaced with a annual saving envisaged was 2.5 MW high efficiency motor along ` 4.48 Crores. with VFD by incurring a cost of ` 18.2 • KR has replaced conventional Crores in Petrochemical Fluidized lights with LED lights in Central Catalytic Cracking Unit (PFCCU). This Quality Control Lab (CQCL) has resulted in reduction of steam resulting in annual cost savings of consumption of 240 (TPD) and a ` 4.24 lakhs. saving of ` 1.3 Crores per annum. • A designated consumer under the PAT • Make up water heater pump and scheme, KR exceeded the target for PAT condensate storage tank pump were cycle II by achieving an MBN of 71.95 against stopped in IREP utility balances of a target of 73.24. The same was verified by plant (BOP) by routing DM water Monitoring & Verification audit conducted directly to Boiler de-aerators. This in 2019-20. BPCL-KR has sustained the resulted in power saving of 504 (KW) performance and achieved an MBN of 68.5 and an annual saving of ` 2 Crores. in 2019-20. • An annual saving of ` 4 Crores was • BPCL-KR is certified with ISO 50001:2011 achieved by optimizing operation of and has started upgradation to ISO hot water belt flow through exchangers 50001:2018 version and is targeting the and stopping one hot water belt pump. same by September 2020. This resulted in power saving of 685 • KR desilted its existing rainwater harvesting (KW) in PFCCU. pond in 2019-20 to make use of rain water • By introducing deproponizer bottom as fire water. With desilting, the total water stream into reactor riser in PFCCU, capacity increased to 2.25 lakhs cubic meter resulted in decreased riser bottom pumpable water. steam of 108 (TPD) and an annual • KR has developed an in-house “Emission saving amounting to ` 1.7 Crores. Model”, a powerful tool for quantitative • In PFCCU, re-boiling steam was emission calculations. The process emission optimized in debutanizer and stripper model supports KR to immediately verify the column, which resulted in steam various stack emission parameters on a saving of 360 (TPD) and an annual single platform along with heater efficiencies. saving of ` 4.4 Crores. • As part of its green initiative, KR planted • Fuel gas used in flare header purging 1400 fruit bearing trees on a two acre land. was partially substituted with Nitrogen • Fiber Optic Based Pipeline Condition to save fuel gas (approx. 250 Kg/hr.), Monitoring and Surveillance System (PCMS) resulting in saving of ` 1.4 Crores per has been provided in MMBPL (Kota- annum. Bijwasan Section): 488 Km, BKPL (Bina – • In PFCCU, Steam to propylene stripper Kota Section) : 259 Km, KJPL ( Kota Jobner re-boiler was isolated and re-boiling Section) : 211 Km and MUPL (Mumbai with hot water belt alone was used for – Uran Section) : 29 Km. This helped in chemical grade propylene production. monitoring and preventing malpractices. This resulted in reduction in steam • Pipeline division has implemented an consumption by 360 (TPD) and the initiative of keeping an Emergency Rescue saving was approx. ` 22 Crores per Vehicle (ERV) with a dedicated crew in ready annum. condition all the time to suck the oil in case
Annual Report 2019-20 141 of leakage along the pipeline route to avoid with BPCL refineries, with the help of which, real any damage to the environment. time emission data is made available to Pollution • Assessment and certification was completed Control Board. for one Retail and one Lubricant location for 7. Number of showcause/ legal notices received Zero waste to Land fill Certification. It was a from CPCB/SPCB which are pending (i.e. not huge success with both scoring the highest resolved to satisfaction) as on end of Financial level of “at least 99% diversion rate”. Year. • BPCL participated in benchmarking of our The pending showcause/ legal notices received environment initiatives through Carbon from CPCB/SPCB for FY 2019-20 are mentioned Disclosure Project (CDP Platform). This below: year BPCL has received a rating as D which means “Disclosure: Transparent about • Tamil Nadu Pollution Control Board issued Climate Issues.” notice for spillage of oil into Marine water • BPCL conceptualized and organized the “One during Fuel oil cargo discharge by MT Corals Energy - One Force, One Vision” forum for Stars at Kamarajar Port Ltd., ETTPL Ennore. integration, standardization and replication • Show Cause Notice (SCN) dated 05.11.2018 of HSSE initiatives in Marketing and Refinery was issued by CPCB with respect to units. Various One Energy action groups installation of Vapor Recovery System were created to work on different aspects. (VRS) at ROs in Delhi & NCR as per NGT • A Handbook on Composting, Carbon orders passed in OA No. 147 of 2016 – Sequestration Study process note and Aditya Prasad vs. UOI & Ors. CPCB directed Sustainability Report were published during BPCL to pay environmental compensation of the year. ` 1 Crore. BPCL challenged the NGT’s orders passed in OA No. 147 of 2016 by filing an • An Environment Cell was created at all Appeal in the Supreme Court. marketing locations to facilitate environment related issues and ensure the legal Supreme Court vide judgment dated environmental compliances. 14.02.2019 partially allowed the appeals filed by OMCs and modified the orders passed • HR in all regions has taken initiatives to stop by National Green Tribunal to the extent of Plastic Bottles in all offices and replaced extending the timeline for installation of Vapor them with Steel Bottles. Northern Region HR Recovery System (VRS) at Retail Outlets & has reduced approx. 15,000 Bottles which is Oil depots in National Capital Territory Delhi equivalent to 150 kg of Pet Bottles and 900 & National Capital Region. As regards the kg of CO e. 2 timelines for installing VRS state IB & II at • A cloud-based HSSE Portal was developed Retail Outlets in NCT Delhi and NCR, BPCL as a centralized repository of HSSE data. has been complying with the timelines. https://www.bharatpetroleum.in/Sustainability/ However, due to COVID-19 pandemic Sustainability-Reports.aspx. situation and consequent lockdown and other restrictions, the installation of VRS stage 6. Are the Emissions/Waste generated by the IA at oil depots within stipulated timeline Company within the permissible limits given by of 31.03.2020 have become impossible. CPCB/SPCB for the financial year being reported? Accordingly, BPCL filed online application Yes, emission/waste generated during the course praying for extension of time and got it listed of operation are constantly monitored to ensure before Hon’ble Supreme Court for virtual that they are within permissible limits prescribed hearing. After hearing arguments advanced by respective Central Pollution Control Board/ by Shri Tushar Mehta, ASG on behalf of State Pollution Control Board. Emission levels OMCs through video conferencing, Hon’ble are captured as Sustainable Development data Supreme Court vide order dated 08.04.2020 by Refineries and Marketing Locations. A robust has extended the timeline for further period online emission monitoring system is available of six months i.e. by 30.09.2020.
142 Bharat Petroleum Corporation Limited Principle 7: Responsible Public Policy Principle 8: Inclusive Growth Advocacy 1. Does the Company have specified programs/ 1. Is your Company a member of any trade and initiatives/projects in pursuit of the policy related chamber or association? If Yes, name only those to Principle 8? If yes, details thereof. major ones that your business deals with: The CSR projects of BPCL aim at benefitting the Yes. BPCL is a member of several industrial and community from the low socio-economic strata, trade associations. Some of the major ones are which are identified as vulnerable, in & around listed below: the business units such as refineries, depots, installations, LPG bottling plants. All the projects • Confederation of Indian Industry (CII) of BPCL under the focus areas are inclined towards the rooted belief of inclusive growth & • Federation of Indian Chambers of Commerce equitable development of the most marginalized and Industry (FICCI) communities. • Bombay Chamber of Commerce & Industry 2. Are the programs/projects undertaken through • ASSOCHAM in-house team/own foundation/external NGO/ Government structures/any other organization? • Indian Merchant Chambers BPCL largely collaborates with various NGOs • World Energy Council-Indian Member registered as society/trust/section 8 company, Committee foundations, Government structures, and other • World LP Gas Association professional agencies for execution of the on- field projects. BPCL has undertaken projects • Petroleum Federation of India in collaboration with other industry members • Bio Diesel Association of India to develop the communities in the aspirational districts and also Skill Development Institutes in • The Advertising Standards Council of India various cities. • National Accreditation Board for Testing and 3. Have you done any impact assessment of your Calibration Laboratories initiative? • Oil Industry Safe Directorate (OISD) Yes. BPCL carries out impact assessment of its CSR projects. The assessment is conducted both • Petroleum and Explosives Safety by the internal mechanisms and third-party for Organisation (PESO) ensuring transparency. 2. Have you advocated/lobbied through above 4. What is your Company’s direct contribution to associations for the advancement or improvement community development projects-amount in INR of public good? Yes/No; if yes specify the broad and the details of the projects undertaken? areas. BPCL’s contribution to the community development BPCL has been a part of various associations and projects for during the year 2019-20 has been has put forward its opinion from the industry point ` 345.57 Crores. Details of various CSR Projects of view by participating in concerned forums. BPCL undertaken are provided in the Annual Report in the also takes part in consultative committees that section “CSR Activities”. frame policies as and when asked by Government 5. Have you taken steps to ensure that this or regulatory departments. community development initiative is successfully The senior officers of BPCL have been members of adopted by the community? Please explain in 50 several working committees in various areas such words, or so. as Oil India Safety Directorate (OISD), Petroleum Community involvement and participation is and Natural Gas Regulatory Board (PNGRB), Center fundamental to BPCL at each step for all its for High Technology (CHT), etc. and contribute CSR projects/programs. Assessment efforts towards their agenda. are taken from the stage of planning till the end
Annual Report 2019-20 143 to form community-based organizations like During the year 2019-20, 3 cases were filed on farmer committees, village water committees, grounds of unfair trade practices. The details are alumni committees and school management as follows: committees. Several capacity building sessions, • CC No. 205 of 2019 (Imadulla Sardar vs training programs and meetings, etc. are held Dipshikha Gas and BPCL) before District for these groups and other various stakeholders Consumer Forum Kulpi Baruipur, South throughout the project. The community also 24-Parganas: The complainant is a consumer contributes a small amount financially or through of Bharatgas. The present case has been “Shramdaan” in several projects, such as specific filed on account of non-receipt of subsidy. skill development & water conservation programs. He has alleged that he has not received This ensures project ownership by the community subsidy from the first day of delivery of gas. and sustainability on BPCL’s exit. BPCL also uses As per complainant cause of action arose transformed communities as resource groups to on 16.08.2017 and continued (no specific empower other villages/ communities. amt. of subsidy claimed in complaint). He Principle 9: Customer Value has claimed ` 30,000/- besides subsidy 1. What percentage of customer complaints/ amount. consumer cases are pending as at the end of the financial year? • CC No. 157 of 2019 (Dipankar Roy vs Dipshikha Gas and BPCL) before District During the year 2019-20, a total of 13,02,472 Consumer Forum Kulpi Baruipur, South Customer Complaints have been received and 24-Parganas: Consumer case filed on 13,02,401 are resolved, which is 99.99% with account of non- receipt of subsidy amount an average closure time of one day. Balance by the Complainant in his bank account complaints are being addressed subsequently and from 24.11.2018. Dipshikha Gas, Harinavi closed satisfactorily. (LPG Distributor) has been made as 2. Does the Company display product information opposite party No.1 and BPCL as opposite on the product label, over and above what is party No.2. Complainant has prayed before mandated as per local laws? Yes/No/N.A./ consumer forum to direct opposite parties Remarks (additional information) to credit the due subsidy amount in his Yes, the Company displays product information account and direction to opposite party to on the product label. BPCL provides information pay the compensation of ` 30,000/- to the on product labels according to National and complainant as Compensation. International specifications. It additionally displays • CC No. 72 of 2019 (Rajkumar Singh vs information for safe handling of the product. New India Insurance, M/s Gaudi Enterprise 3. Is there any case filed by any stakeholder against and BPCL) before District Consumer Forum, the Company regarding unfair trade practices, Vaishali at Hajipur: This consumer case filed irresponsible advertising and/or anti-competitive by one Shri. Rajkumar Singh (husband of behaviour during the last five years and pending Smt. Sona Devi). It has been stated therein as of end of the financial year. If so, provide that complainant’s wife Smt. Sona Devi details thereof, in about 50 words or so. was the customer of Bharatgas (M/s Gaudi No. of Cases No. of Cases Enterprise). It has been alleged therein that filed in the pending as on end on 15.02.2019 while making tea due to last 5 years of the financial year leakage of LPG from the cylinder, his wife 2019-20 caught fire. Subsequently she expired due to burn injuries on 01.03.2019. Thereafter Unfair trade 3 3 his son informed the distributor about the practices incident. The distributor then wrote to the Irresponsible Nil Nil insurance company to investigate the matter advertising and pay the compensation. Anti-competitive 5 5 Since the insurance company neither behaviour conducted any enquiry nor paid any
144 Bharat Petroleum Corporation Limited compensation, the complainant has filed • Competition Commission of India (CCI) the present consumer case wherein he has vide its own cognizance started enquiry sought a compensation of ` 10 lakhs as well against OMCs by observing that OMCs are as ` 50,000/- for mental harassment and behaving like a cartel by fixing petrol prices. ` 10,000/- as litigation cost. He has further Preliminary objection taken by Respondent alleged that in case the insurance company OMCs that CCI does not have jurisdiction fails to pay the said amount the OMC i.e. and PNGRB has jurisdiction to hear this BPCL is liable to pay the same. BPCL shall issue. Commission ordered DG investigation be filing the reply on the next date. which should cover the entire value chain of price build up. BPCL challenged the Details of cases regarding Anti-competitive said order in Delhi High Court vide WP behaviour are as follows: 7303/2013 and Delhi High Court vide order • RIL/Essar/Shell had filed a complaint before dated 22.11.2013 ordered stay in the said the Petroleum & Natural Gas Regulatory proceedings - Sub Judice Board (PNGRB) against PSU OMCs and • Appeal filed against order dated 11.02.2014 upstream companies alleging collusion, passed by CCI in suo-motu case no. cartelization and predatory pricing for MS 95/2013. Federation is alleging unfair and HSD - Sub Judice terms in Dealership Agreements for (a) Not • A complaint was filed by M/s RIL before the allowing to use petroleum products of other Competition Commission of India alleging OMCs and, (b) Reserving Dealer land just for cartelization and misuse of its dominant selling oil and impose condition to give land position - Sub Judice to OMC when dealership is terminated - Sub Judice. • India Glycols Ltd. vs India Sugar Mills Associates & Ors. alleging that ISMA, on 4. Did your Company carry out any consumer survey/consumer satisfaction trends? behalf of member companies (including BPCL) have lobbied with Govt. of India for BPCL has not undertaken any structured survey increasing the price of Ethanol from various during the year 2019-20. However, BPCL takes suppliers – Sub Judice (Multiple cases are customer feedback through various channels on a filed on this issue in several forums) regular basis.
Annual Report 2019-20 145 ANNEXURE TO THE DIRECTORS’ REPORT
Annexure E COMMENTS OF THE COMPTROLLER and AUDITOR GENERAL OF INDIA
COMMENTS OF THE COMPTROLLER AND The preparation of financial statements of Bharat Petroleum AUDITOR GENERAL OF INDIA UNDER SECTION Corporation Limited for the year ended 31 March 2020 in 143(6)(b) OF THE COMPANIES ACT, 2013 ON accordance with the financial reporting framework prescribed THE FINANCIAL STATEMENTS OF BHARAT under the Companies Act, 2013 is the responsibility of the PETROLEUM CORPORATION LIMITED FOR THE management of the company. The statutory auditor appointed YEAR ENDED 31 MARCH 2020 by the Comptroller and Auditor General of India under section 139(5) is responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 3 June 2020. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial statements of Bharat Petroleum Corporation Limited for the year ended 31 March 2020 under section 143(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors’ report under section 143(6)(b) of the Act.
For and on behalf of the Comptroller & Auditor General of India
Sd/- Tanuja Mittal Place : Mumbai Principal Director of Commercial Audit, Mumbai Date : 30 July 2020
146 Bharat Petroleum Corporation Limited COMMENTS OF THE COMPTROLLER and AUDITOR GENERAL OF INDIA COMMENTS OF THE COMPTROLLER The preparation of consolidated financial statements of Bharat Petroleum Corporation AND AUDITOR GENERAL OF INDIA Limited for the year ended 31 March 2020 in accordance with the financial reporting UNDER SECTION 143(6)(b) READ WITH framework prescribed under the Companies Act, 2013 (Act) is the responsibility of SECTION 129(4) OF THE COMPANIES the management of the company. The statutory auditors appointed by the Comptroller ACT, 2013 ON THE CONSOLIDATED and Auditor General of India under section 139(5) read with section 129(4) of the Act FINANCIAL STATEMENTS OF BHARAT are responsible for expressing opinion on the financial statements under section 143 PETROLEUM CORPORATION LIMITED read with section 129(4) of the Act based on independent audit in accordance with the FOR THE YEAR ENDED 31 MARCH 2020 standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 3 June 2020. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) read with section 129(4) of the Act of the consolidated financial statements of Bharat Petroleum Corporation Limited for the year ended 31 March 2020. We conducted a supplementary audit of the financial statements of (Annexure-I), but did not conduct supplementary audit of the financial statements of (Annexure-II) for the year ended on that date. Further, section 139(5) and 143(6) (b) of the Act are not applicable to (Annexure-III) being private entities incorporated in Foreign countries under the respective laws, for appointment of their Statutory Auditor and for conduct of supplementary audit. Accordingly, Comptroller and Auditor General of India has neither appointed the Statutory Auditors nor conducted the supplementary audit of these companies. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors’ report under section 143 (6)(b) of the Act. For and on behalf of the Comptroller & Auditor General of India Sd/- Tanuja Mittal Place : Mumbai Principal Director of Commercial Audit, Mumbai Date : 30 July 2020 Annexure-I Annexure-II Annexure-III Audit Conducted Audit not Conducted Audit not applicable Account received and NRC Account not received issued/being issued (A) Subsidiaries: (A) Subsidiaries: (A) Subsidiaries: Numaligarh Refinery Limited Nil Nil Nil Bharat PetroResources Limited Bharat Gas Resources Limited (B) Joint Ventures: (B) Joint Ventures: (B) Joint Ventures: Mumbai Aviation Fuel Farm Kochi Salem Pipeline Private Haridwar Natural Gas Private Bharat Oman Refineries Facility Pvt Ltd Limited Limited Limited Ratnagiri Refinery & Central UP Gas Limited Goa Natural Gas Private Matrix Bharat Pte. Ltd. Petrochemical Ltd Limited Maharashtra Natural Gas Delhi Aviation Fuel Facility BPCL-KIAL Fuel Farm Facility Bharat Stars Services Pvt. Ltd Limited Private Limited Private Limited Sabarmati Gas Limited IHB Pvt. Ltd (C) Associates: (C) Associates: (C) Associates: GSPL India Gasnet Ltd. Nil Nil Petronet LNG Limited GSPL India Transco Ltd. Fino PayTech Limited Indraprastha Gas Limited Kannur International Airport Limited
Annual Report 2019-20 147 - - ( ` Crores) as Advances Amount Paid NA NA Board A nnexure F Dates of Approval
2,958.43 42,420.06 ( ` Crores) in FY 2019-20 Chairman & Managing Director For and on behalf of the Board Directors sd/- D. Rajkumar Transaction Values Transactions Salient Terms of the Contracts/Arrangements/ Purchase of goods Sale of goods 2019-20 2019-20 Transactions Arrangements/ Duration of the Contracts/ F orm N o . AOC-2 Nature of Contracts/ Sale, Purchase of goods Sale, Purchase of goods Arrangements/Transactions Nature of Relationship Joint venture Joint venture (Pursuant to clause (h) of sub-section (3)of section 134 the Act and Rule 8(2) Companies (Accounts) Rules, 2014) June, 2020 rd Name of the Related Party : Mumbai : 3 Details of contracts or arrangements transactions not at arm’s length basis Nil Details of material contracts or arrangements transactions at arm’s length basis Bharat Oman Refineries Limited Bharat Oman Refineries Limited The threshold for determining the material transaction has been considered in line with rule no. 15 (3) of Companies (Meetings Board and its powers) Rules, 2014. All Transactions are in ordinary course of business and at arm’s length. 1 2 1. 2. S. No. A nnexure TO THE DIRECTORS’ REPORT Form for disclosure of particulars of contracts / arrangements entered into by the company with related parties referred to in subsection (1) of section 188 the Companies Act, 2013 including certain entered into by the company Form for disclosure of particulars contracts / arrangements arm’s length transactions under third proviso thereto. Note: Place Date
148 Bharat Petroleum Corporation Limited ANNEXURE TO THE DIRECTORS’ REPORT
ANNEXURE G FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the Financial Year ended on 31st March, 2020 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS (i) CIN L23220MH1952GOI008931 (ii) Registration date 3rd November,1952 (iii) Name of the Company Bharat Petroleum Corporation Limited (iv) Category/Sub-Category of the Company Public Company Limited by Shares/Government Company (v) Address of the Registered Office and Bharat Bhavan, 4&6, Currimbhoy Road, Ballard Estate, contact details P.B. No. 688, Mumbai 400 001, India Tel No. 022 2271 3000 / 4000; Fax. No. 022 2271 3874 Email : [email protected] Website : www.bharatpetroleum.in (vi) Whether listed Company Yes (vii) Name, Address and Contact details of Data Software Research Co. Pvt. Ltd. Registrar and Transfer Agent, if any 19, Pycrofts Garden Road, Off. Haddows Road, Nungambakkam, Chennai- 600 006 Ph: +91-44-2821 3738 / 2821 4487; Fax: 91-44-2821 4636; Email : [email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY Sl. Name and Description of main NIC Code of the % to total turnover of the Company No. products/services Product/Service (After allocating Cash subsidy received) 1 Motor Spirit (MS) Group 192; sub-class: 19201 23.41% 2 High Speed Diesel (HSD) Group 192; sub-class: 19201 52.08% 3 Liquefied Petroleum Gas (LPG) Group 192; sub-class: 19203 11.37%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Sl. Name and address of the Company CIN/GLN Holding/ % of Applicable No. Subsidiary/ shares Section Associate held 1 Bharat Gas Resources Limited U11200MH2018GOI310461 Subsidiary 100% 2 (87) Bharat Bhavan, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai, Maharashtra 400001 2 Bharat Oman Refineries Ltd. U11101MP1994PLC008162 Subsidiary **63.38% 2 (87) Administrative Bldg., Refinery Complex, Post BORL Residential Complex, Bina, Dist. Sagar M.P. 470124 3 Bharat PetroResources Limited, Bharat Bhavan, U23209MH2006GOI165152 Subsidiary 100% 2(87) 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai, Maharashtra 400001, India 4 Bharat PetroResources JPDA Limited, Bharat U23209MH2006GOI165279 Subsidiary *100% 2(87) Bhavan, 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai, Maharashtra 400001, India 5 BPCL-KIAL Fuel Farm Pvt. Ltd. U23200KL2015PTC038487 Subsidiary **74% 2 (87) C/O Kannur International Airport, Karaperavoor P.O, Mattannur Kannur Kerala 670702 6 BPRL International BV., Not applicable Subsidiary *100% 2(87) Strawinskylaan 937, 1077 XX Amsterdam, The Netherlands.
Annual Report 2019-20 149 Sl. Name and address of the Company CIN/GLN Holding/ % of Applicable No. Subsidiary/ shares Section Associate held 7 BPRL International Singapore Pte. Ltd., Not applicable Subsidiary *100% 2(87) 8 Cross Street,#24-03/04, PWC Building, Singapore 048424 8 BPRL International Ventures BV Not applicable Subsidiary *100% 2(87) Strawinskylaan 937, 1077 XX Amsterdam, The Netherlands. 9 BPRL Ventures BV., Not applicable Subsidiary *100% 2(87) Strawinskylaan 937, 1077 XX Amsterdam, The Netherlands. 10 BPRL Ventures Indonesia BV Not applicable Subsidiary *100% 2(87) Strawinskylaan 937, 1077 XX Amsterdam, The Netherlands. 11 BPRL Ventures Mozambique BV Not applicable Subsidiary *100% 2(87) Strawinskylaan 937, 1077 XX Amsterdam, The Netherlands. 12 Numaligarh Refinery Limited U11202AS1993GOI003893 Subsidiary 61.65% 2 (87) 122 A, G. S. Road, Christianbasti, Guwahati, Assam 781 005 13 Bharat Renewable Energy Ltd. U74999UP2008PLC035469 Associate @33.33% 2 (6) Official Liquidator, Ministry of Corporate Affairs, 9th Floor, Sangam Place, Civil Lines, Allahabad, U.P. 211001 14 Bharat Stars Services Pvt. Ltd. U11100DL2007PTC168158 Associate 50% 2 (6) BPCL Aviation Fuelling Station, Indira Gandhi International Airport, Terminal II, Shahabad Mohammadpur Railway Station, New Delhi 110 061 15 Central U.P. Gas Ltd. U40200UP2005PLC029538 Associate 25% 2 (6) A-1/4, 7th Floor, UPSIDC Complex, Lakhanpur, Kanpur, U.P. 208024 16 Delhi Aviation Fuel Facility Pvt. Ltd. U74999DL2009PTC193079 Associate 37% 2 (6) Aviation fuelling Station, Shahabad Mohammadpur Railway Station, Dwarka Sector 8, Indira Gandhi International Airport, New Delhi 110 061 17 FINO Pay Tech Ltd. U72900MH2006PLC162656 Associate ^20.73% 2 (6) Mindspace Juinagar, 9th Floor, Plot No. Gen 2/1/F, Tower 1, TTC Industrial Area, MIDC Shirwane, Juinagar, Navi Mumbai, Thane 400706 18 Goa Natural Gas Pvt. Ltd. U40300GA2017PTC013095 Associate 50% 2 (6) Rajan Villa, Plot No. 33, Journalist Colony, Parvorim, Goa 403 521. 19 GSPL India Gasnet Ltd. U40200GJ2011SGC067449 Associate 11% 2 (6) GSPC Bhavan, Behind Udyog Bhavan, Sector 11, Gandhinagar, Gujarat 382011 20 GSPL India Transco Ltd. U40200GJ2011SGC067450 Associate 11% 2 (6) GSPC Bhavan, Behind Udyog Bhavan, Sector 11, Gandhinagar, Gujarat 382011 21 Haridwar Natural Gas Pvt. Ltd. U40300UR2016PTC007004 Associate 50% 2 (6) C/o BPCL Landhora, Roorkee, Haridwar, Uttarakhand 247 667 22 IHB Pvt. Ltd. U60230GJ2019PTC109127 Associate 25% 2 (6) C/o Indian Oil Corporation Ltd., Sabarmati Terminal, Near D Cabin, Sabarmati, Ahmedabad 380019
150 Bharat Petroleum Corporation Limited Sl. Name and address of the Company CIN/GLN Holding/ % of Applicable No. Subsidiary/ shares Section Associate held 23 Indraprastha Gas Ltd. L23201DL1998PLC097614 Associate 22.5% 2 (6) IGL Bhawan, Plot No. 4, Community Centre, Sector 9, R. K. Puram, New Delhi 110 022 24 Kannur International Airport Ltd. U63033KL2009PLC025103 Associate 16.20% 2 (6) Parvathy, T.C. 36/1 Chacka, NH Byepass, Pettah, Thiruvananthapuram, Kerala 695 024 25 Kochi Salem Pipeline Private Ltd. U40300KL2015PTC037849 Associate 50% 2 (6) Malayil Majesty Bldg., Room No. 174 G, 2nd Floor, Near Railway Over Bridge, Refinery Road, Thrippunithura, Kochin, Kerala 682 301 26 Maharashtra Natural Gas Ltd. U11102PN2006PLC021839 Associate 22.5% 2 (6) A Block Plot No. 27, Narveer Tanajiwadi, Commercial Bldg., 1st Floor, Shivaji Nagar, Pune 411 005 27 Matrix Bharat Pte Ltd. Not Applicable Associate 50% 2 (6) 2 Shenton Way # 18-01 SGX Centre 1, Singapore 068804 28 Mumbai Aviation Fuel Farm Facility Pvt. Ltd. U63000MH2010PTC200463 Associate 25% 2 (6) Opp. ITC Maratha, Sahar Police Station Road, CSI Airport, Sahar, Andheri (East), Mumbai 400 099 29 Petronet CI Ltd., U23201GJ2000PLC039031 Associate 11% 2(6) C/O Indian Oil Corporation Ltd. Koyali, Ahmedabad Pipeline, P.O. Jawahar Nagar, Vadodara, Gujarat 391320 30 Petronet India Ltd. U45203MH1997PLC108251 Associate 16% 2 (6) C/O Mr. A. Sekar (Liquidator) 305, Sai Jyote, Lalubhai Park West, Vile Parle West, Mumbai 400 056 31 Petronet LNG Ltd. L74899DL1998PLC093073 Associate 12.5% 2 (6) World Trade Centre, 1st Floor, Babar Road, Barakhamba Lane, New Delhi 110 001 32 Ratnagiri Refinery and Petrochemicals Ltd., U23200MH2017PLC300014 Associate 25% 2 (6) The IL&FS Financial Centre, 5th Floor, B Wing, ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051 33 Sabarmati Gas Ltd. U40200GJ2006PLC048397 Associate 49.94% 2 (6) Plot no.907, Sector 21, Gandhinagar, Gujarat 382 021 34 Ujjwala Plus Foundation, U74999MH2017NPL297692 Associate N A 2 (6) Indian Oil Bhavan, G-9, Ali Yavar Jung Marg, (Section Bandra (East), Mumbai 400 051 8 Co. Limited by guarantee. Guaranteed obligation of BPCL is ` 5 lakh i.e.25% of total guaranteed obligation) * Shares are held by Subsidiary ** Bharat Oman Refineries Ltd and BPCL-KIAL Fuel Farm Private Limited are treated as Joint venture for consolidation of accounts as per IndAS. @ Shareholding as per Joint Venture Agreement ^ Shareholding on fully diluted basis.
Annual Report 2019-20 151 IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) (i) Category-wise Shareholding
Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change (01.04.2019) (31.03.2020) during the year Demat Physical Total % of Total Demat Physical Total % of Total Shares Shares A. Promoters 1 Indian (a) Individual /HUF ------(b) Central Govt/State Govt(s) 1,15,60,95,962 - 1,15,60,95,962 53.29 1,14,91,83,592 - 1,14,91,83,592 52.98 -0.31 (c) State Govt(s) ------(d) Bodies Corporate ------(e) Banks/FI ------(f) Any other ------Sub-Total (A)(1) 1,15,60,95,962 - 1,15,60,95,962 53.29 1,14,91,83,592 - 1,14,91,83,592 52.98 -0.31 2 Foreign (a) NRIs – Individuals ------(b) Others – Individuals ------(c) Bodies Corporate ------(d) Banks/FI ------(e) Any other ------Sub-Total (A)(2) ------Total Shareholding of Promoter 1,15,60,95,962 - 1,15,60,95,962 53.29 1,14,91,83,592 - 1,14,91,83,592 52.98 -0.31 A=(A)(1)+(A)(2) B. Public Shareholding 1 Institutions (a) Mutual Funds/ UTI 17,22,42,625 110 17,22,42,735 7.94 27,76,22,891 110 27,76,23,001 12.80 4.86 (b) Banks/FI 35,73,523 9,133 35,82,656 0.17 28,86,701 6,733 28,93,434 0.13 -0.04 (c) Central Govt ------(d) State Govt(s) - 1,86,66,666 1,86,66,666 0.86 - 1,86,66,666 1,86,66,666 0.86 0.00 (e) Venture Capital Funds ------(f) Insurance Companies 15,64,77,475 - 15,64,77,475 7.21 14,48,23,947 - 14,48,23,947 6.68 -0.53 (g) FIIs 33,93,24,282 2,400 33,93,26,682 15.64 26,64,87,736 2,400 26,64,90,136 12.28 -3.36 (h) Foreign Venture Capital Funds ------(I) Others (Specify) ------Sub-Total (B)(1) 67,16,17,905 1,86,78,309 69,02,96,214 31.82 69,18,21,275 1,86,75,909 71,04,97,184 32.75 0.93 2 Non -Institutions (a) Bodies Corporate 5,22,36,315 24,360 5,22,60,675 2.41 3,20,58,649 24,388 3,20,83,037 1.48 -0.93 (i) Indian ------(b) Individuals ------(i) Individual shareholders holding Nominal 4,55,48,290 32,89,650 4,88,37,940 2.26 4,80,21,078 29,17,437 5,09,38,515 2.35 0.09 share capital upto `1 lakh. (ii) Individual shareholders holding Nominal 10,873,623 2,94,468 1,11,68,091 0.51 1,61,80,195 2,94,468 1,64,74,663 0.76 0.25 share capital in excess of `1 lakh (c) Others (Specify) ------(i) NRI 32,25,368 99,131 33,24,499 0.15 28,20,710 98,951 29,19,661 0.13 -0.02 (ii) BPCL Trust for investment in shares 20,23,72,422 - 20,23,72,422 9.33 20,23,72,422 - 20,23,72,422 9.33 0.00 (iii) Clearing Members 48,96,941 - 48,96,941 0.23 47,83,670 - 47,83,670 0.22 -0.01 Sub-Total (B)(2) 31,91,52,959 37,07,609 32,28,60,568 14.89 30,62,36,724 33,35,244 30,95,71,968 14.27 -0.62 Total Public Shareholding 99,07,70,864 2,23,85,918 1,01,31,56,782 46.71 99,80,57,999 2,20,11,153 1,02,00,69,152 47.02 0.31 (B)=(B)(1)+B(2) TOTAL (A)+(B) 2,14,68,66,826 2,23,85,918 2,16,92,52,744 100.00 2,14,72,41,591 2,20,11,153 2,16,92,52,744 100.00 0.00 (C) Shares held by Custodians for GDRs & ------ADRs GRAND TOTAL (A)+(B)+(C) 2,14,68,66,826 2,23,85,918 2,16,92,52,744 100.00 2,14,72,41,591 2,20,11,153 2,16,92,52,744 100.00 0.00
152 Bharat Petroleum Corporation Limited (ii) Shareholding of Promoter
Sl. Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change No. (01.04.2019) (31.03.2020) in share No. of Shares % of total % of shares No. of Shares % of total % of shares holding shares of the Pledged/ shares of the Pledged/ during the company encumbered company encumbered year to Total to Total shares shares 1 President of India 1,15,60,95,962 53.29 - 1,14,91,83,592 52.98 - -0.31 Total 1,15,60,95,962 53.29 - 1,14,91,83,592 52.98 - -0.31 (iii) Change in Promoters’ Shareholding (please specify, if there is no change)
Sl. Name Date Reason Increase/ Cumulative Shareholding No. Decrease in Shareholding No. of Shares % 1 President of India 01.04.2019 - - 1,15,60,95,962 53.29 04.10.2019 Disinvestment-Bharat 22 ETF -72,58,936 1,14,88,37,026 52.96 18.10.2019 Purchase 3,46,566 1,14,91,83,592 52.98 31.03.2020 - - 1,14,91,83,592 52.98 Note: There was a reduction in the Promoter’s shareholding due to disinvestment of shares by the Government of India in favor of Bharat 22 ETF (an Exchange Traded Fund inclusive of PSU Stocks) (iv) Shareholding Pattern of top ten Members (other than Directors, Promoters and Holders of GDRs and ADRs)
Sl. Name of Shareholder Shareholding at the Date Increase/ Reason Cumulative Shareholding No. beginning of the year Decrease in during the year (01.04.2019) Shareholding (01.04.2019-31.03.2020) No. of % of total No. of % of total Shares shares Shares shares of the of the company company 1 BPCL Trust for Investment in 20,23,72,422 9.33 01.04.2019 shares 31.03.2020 - - 20,23,72,422 9.33 2 Life Insurance Corporation of 12,74,97,778 5.88 01.04.2019 India 06.12.2019 -6,68,158 sale 12,68,29,620 5.85 13.12.2019 -58,092 sale 12,67,71,528 5.84 20.12.2019 -1,64,785 sale 12,66,06,743 5.84 07.02.2020 -11,63,758 sale 12,54,42,985 5.78 14.02.2020 -20,17,694 sale 12,34,25,291 5.69 21.02.2020 -8,24,406 sale 12,26,00,885 5.65 28.02.2020 -15,42,862 sale 12,10,58,023 5.58 31.03.2020 - - 12,10,58,023 5.58 3 Hdfc Trustee Company Ltd. A/C 1,90,76,275 0.88 01.04.2019 Hdfc Balanced Advantage Fund 26.07.2019 3,66,500 Purchase 1,94,42,775 0.90 30.08.2019 3,54,000 Purchase 1,97,96,775 0.91 13.09.2019 10,00,000 Purchase 2,07,96,775 0.96 01.11.2019 -13,23,500 Sale 1,94,73,275 0.90 29.11.2019 -7,76,634 Sale 1,86,96,641 0.86 13.12.2019 -7,50,000 Sale 1,79,46,641 0.83 03.01.2020 -5,26,000 Sale 1,74,20,641 0.80 07.02.2020 21,98,000 Purchase 1,96,18,641 0.90 14.02.2020 16,00,000 Purchase 2,12,18,641 0.98
Annual Report 2019-20 153 Sl. Name of Shareholder Shareholding at the Date Increase/ Reason Cumulative Shareholding No. beginning of the year Decrease in during the year (01.04.2019) Shareholding (01.04.2019-31.03.2020) No. of % of total No. of % of total Shares shares Shares shares of the of the company company 28.02.2020 5,00,000 Purchase 2,17,18,641 1.00 13.03.2020 10,00,000 Purchase 2,27,18,641 1.05 27.03.2020 11,16,400 Purchase 2,38,35,041 1.10 31.03.2020 - - 2,38,35,041 1.10 4 Sbi Equity Hybrid Fund 1,40,00,000 0.65 01.04.2019 17.05.2019 -10,00,000 Sale 1,30,00,000 0.60 27.09.2019 23,22,889 Purchase 1,53,22,889 0.71 30.09.2019 35,723 Purchase 1,53,58,612 0.71 06.03.2020 21,64,599 Purchase 1,75,23,211 0.81 13.03.2020 14,76,789 Purchase 1,90,00,000 0.88 31.03.2020 - - 1,90,00,000 0.88 5 Governor of Kerala 1,86,66,666 0.86 01.04.2019 31.03.2020 - - 1,86,66,666 0.86 6 Vanguard Total International Stock 1,55,08,229 0.71 01.04.2019 Index Fund 05.04.2019 89,263 Purchase 1,55,97,492 0.72 26.04.2019 -4,11,707 Sale 1,51,85,785 0.70 10.05.2019 2,72,571 Purchase 1,54,58,356 0.71 17.05.2019 96,289 Purchase 1,55,54,645 0.72 24.05.2019 93,119 Purchase 1,56,47,764 0.72 07.06.2019 1,09,762 Purchase 1,57,57,526 0.73 28.06.2019 -1,69,598 Sale 1,55,87,928 0.72 05.07.2019 1,23,224 Purchase 1,57,11,152 0.72 26.07.2019 2,83,350 Purchase 1,59,94,502 0.74 22.08.2019 1,19,745 Purchase 1,61,14,247 0.74 13.09.2019 1,98,136 Purchase 1,63,12,383 0.75 27.09.2019 -2,41,864 Sale 1,60,70,519 0.74 06.12.2019 33,963 Purchase 1,61,04,482 0.74 13.12.2019 57,093 Purchase 1,61,61,575 0.75 17.01.2020 62,364 Purchase 1,62,23,939 0.75 31.01.2020 73,998 Purchase 1,62,97,937 0.75 07.02.2020 60,890 Purchase 1,63,58,827 0.75 14.02.2020 58,134 Purchase 1,64,16,961 0.76 28.02.2020 1,86,773 Purchase 1,66,03,734 0.77 06.03.2020 1,50,259 Purchase 1,67,53,993 0.77 13.03.2020 1,59,549 Purchase 1,69,13,542 0.78 20.03.2020 3,72,019 Purchase 1,72,85,561 0.80 24.03.2020 1,28,855 Purchase 1,74,14,416 0.80 27.03.2020 99,827 Purchase 1,75,14,243 0.81 31.03.2020 - - 1,75,14,243 0.81 7 Life Insurance Corporation of India 1,60,57,033 0.74 01.04.2019 P & GS Fund 31.12.2019 -2,00,000 Sale 1,58,57,033 0.73 31.03.2020 - - 1,58,57,033 0.73
154 Bharat Petroleum Corporation Limited Sl. Name of Shareholder Shareholding at the Date Increase/ Reason Cumulative Shareholding No. beginning of the year Decrease in during the year (01.04.2019) Shareholding (01.04.2019-31.03.2020) No. of % of total No. of % of total Shares shares Shares shares of the of the company company 8 Hdfc Trustee Company Limited- 94,49,000 0.44 01.04.2019 Hdfc Equity Fund 10.05.2019 15,60,000 Purchase 1,10,09,000 0.51 17.05.2019 12,05,000 Purchase 1,22,14,000 0.56 24.05.2019 5,00,000 Purchase 1,27,14,000 0.59 31.05.2019 20,00,000 Purchase 1,47,14,000 0.68 07.06.2019 18,50,182 Purchase 1,65,64,182 0.76 28.06.2019 7,75,000 Purchase 1,73,39,182 0.80 05.07.2019 5,00,000 Purchase 1,78,39,182 0.82 19.07.2019 86,000 Purchase 1,79,25,182 0.83 26.07.2019 8,45,000 Purchase 1,87,70,182 0.87 02.08.2019 3,00,000 Purchase 1,90,70,182 0.88 08.11.2019 -13,60,000 Sale 1,77,10,182 0.82 22.11.2019 -3,27,000 Sale 1,73,83,182 0.80 06.12.2019 -26,397 Sale 1,73,56,785 0.80 20.12.2019 -6,45,000 Sale 1,67,11,785 0.77 27.12.2019 -9,13,000 Sale 1,57,98,785 0.73 31.12.2019 -1,06,000 Sale 1,56,92,785 0.72 31.01.2020 -7,93,000 Sale 1,48,99,785 0.69 31.03.2020 - - 1,48,99,785 0.69 9 Vanguard Emerging Markets Stock 1,57,11,317 0.72 01.04.2019 Index Fund, A Series of Vanguard 12.04.2019 36,317 Purchase 1,57,47,634 0.73 International Equity Index Funds 10.05.2019 37,896 Purchase 1,57,85,530 0.73 21.06.2019 -85,266 Sale 1,57,00,264 0.72 28.06.2019 -2,90,635 Sale 1,54,09,629 0.71 27.09.2019 -3,65,260 Sale 1,50,44,369 0.69 27.12.2019 -2,39,725 Sale 1,48,04,644 0.68 24.03.2020 -88,724 Sale 1,47,15,920 0.68 27.03.2020 -66,237 Sale 1,46,49,683 0.68 31.03.2020 - - 1,46,49,683 0.68 10 Government Pension Fund Global 85,86,111 0.40 01.04.2019 03.05.2019 1,88,700 Purchase 87,74,811 0.40 10.05.2019 5,66,076 Purchase 93,40,887 0.43 27.09.2019 25,38,314 Purchase 1,18,79,201 0.55 30.09.2019 5,05,000 Purchase 1,23,84,201 0.57 11.10.2019 8,00,196 Purchase 1,31,84,397 0.61 22.11.2019 4,14,195 Purchase 1,35,98,592 0.63 06.12.2019 5,04,040 Purchase 1,41,02,632 0.65 20.12.2019 3,03,784 Purchase 1,44,06,416 0.66 10.01.2020 -5,82,499 Sale 1,38,23,917 0.64 31.03.2020 - - 1,38,23,917 0.64 Note: The shares of the Company are traded on daily basis and hence, date wise increase/decrease in shareholding is provided as per weekly download from Depositories.
Annual Report 2019-20 155 (v) Shareholding of Directors and Key Managerial Personnel
Sl. NAME Shareholding at the Date Increase/ Reason Cumulative Shareholding No. beginning of the Decrease in during the year year(01.04.2019) Shareholding (01.04.2019-31.03.2020) No. of % of Total No. of % of Total Shares Shares of Shares Shares the of the Company Company Whole Time Directors: 1 Shri D. Rajkumar 3,600 - 01.04.2019 - - 3,600 0.00 Chairman & Managing Director 31.03.2020 - - 3,600 0.00 2 Shri R. Ramachandran 1,224 - 01.04.2019 - - 1,224 0.00 Director (Refineries) 31.03.2020 - - 1,224 0.00 3 Shri K. Padmakar - - 01.04.2019 - - - - Director (Human Resources) 31.03.2020 - - - - 4 Shri Arun Kumar Singh 2,100 - 01.04.2019 - - 2,100 0.00 Director (Marketing) 31.03.2020 - - 2,100 0.00 5 Shri Vijayagopal N. 3,000 - 01.04.2019 - - 3,000 0.00 Director (Finance) 31.03.2020 - - 3,000 0.00 Non-Executive (Ex-Officio) Directors: 6 Shri Rajiv Bansal - - 01.04.2019 - - - - (Up to 07.01.2020) 07.01.2020 - - - - 7 Shri Rajesh Aggarwal - - 08.01.2020 - - - - (w.e.f. 08.01.2020) 31.03.2020 - - - - 8 Dr. K. Ellangovan - - 01.04.2019 - - - - 31.03.2020 - - - - Non-Executive (Independent) Directors: 9 Shri Rajesh Mangal - - 01.04.2019 - - - - (Up to 30.11.2019) 30.11.2019 - - - - 10 Shri Vishal V Sharma - - 01.04.2019 - - - - (Up to 08.02.2020) 08.02.2020 - - - - 11 Shri V.S. Oberoi - - 01.04.2019 - - - - 31.03.2020 - - - - 12 Smt. Jane Mary Shanti Sundharam - - 01.04.2019 - - - (Up to 04.03.2020) 04.03.2020 - - - - 13 Shri H. P. Shah - - 16.07.2019 - - - - (w.e.f. 16.07.2019) 31.03.2020 - - - - Key Managerial Personnel 14 Shri M. Venugopal 4,230 - 01.04.2019 - - 4,230 0.00 (Up to 31.12.2019) 31.12.2019 - - 4,230 0.00 15 Smt. V. Kala - - 13.02.2020 - - 264 0.00 (w.e.f. 13.02.2020) 31.03.2020 - - 264 0.00
156 Bharat Petroleum Corporation Limited V. Indebtedness Amount (` in Crores) Indebtedness of the Company including interest outstanding/ accrued but not due for payment Particulars Secured Unsecured Deposits Total Loans loans excluding deposits Indebtedness at the beginning of the financial year (01.04.2019) (i) Principal Amount 3,119.62 26,161.55 - 29,281.17 (ii) Interest due but not paid - - - - (iii) Interest accrued but not due - 280.30 - 280.30 TOTAL (i + ii + iii) 3,119.62 26,441.85 - 29,561.47
Changes in Indebtedness during the financial year 2019-2020 Addition 4,731.32 15,282.29 - 20,013.61 Reduction 1,710.56 5,553.94 - 7,264.50 Net Change 3,020.76 9,728.35 - 12,749.11
Indebtedness at the end of the financial year (31.03.2020) (i) Principal Amount 6,140.38 35,914.01 - 42,054.39 (ii) Interest due but not paid - - - - (iii) Interest accrued but not due - 256.19 - 256.19 TOTAL (i + ii + iii) 6,140.38 36,170.20 - 42,310.58 “Indebtedness excludes Lease obligation as per Ind AS 116-Lease”. VI. Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole time Directors and/or Manager (Amount in `) Sl. Particulars of Remuneration Name of MD/WTD/Manager Total No. D. R. K. A. K. Singh N. Rajkumar Ramachandran Padmakar Vijayagopal 1 Gross Salary (a) Salary as per provisions contained in section 49,51,540 44,19,626 43,42,709 41,04,637 40,14,850 2,18,33,362 17(1) of the Income Tax Act, 1961 (b) Value of perquisites under Section 17(2) of the 13,95,178 14,90,089 19,00,641 14,53,342 17,92,644 80,31,894 Income Tax Act, 1961 (c) Profits in lieu of salary under section 17(3) of the ------Income Tax Act, 1961 2 Stock option ------3 Sweat Equity ------4 Commission ------~as % of profit ------~ others, specify ------5 Others: Allowances/Contributions 7,77,773 7,36,592 7,23,750 7,09,768 7,05,257 36,53,140 Total (A) 71,24,491 66,46,307 69,67,100 62,67,747 65,12,751 3,35,18,396 Ceiling as per the Act Provisions of Section 197 of the Companies Act, 2013 with respect to overall maximum managerial remuneration is not applicable to the Company being a Govt. Company as per MCA notification GSR 463 (E ) dated 05.06.2015.
Annual Report 2019-20 157 B. Remuneration to other Directors (Amount in `)
Sl. Particulars of Remuneration Name of Directors Total NO. 1 Independent Directors Rajesh Mangal Vishal V Sharma J.M.Shanti Vinay Sheel H. P. Shah (Up to (Up to Sundharam Oberoi (w.e.f. 30.11.2019) 08.02.2020) (Up to 04.03.2020) 16.07.2019) For attending Board Committee meetings 9,60,000 11,20,000 10,40,000 12,00,000 5,60,000 48,80,000 Commission ------Others, please specify ------Total (1) 9,60,000 11,20,000 10,40,000 12,00,000 5,60,000 48,80,000
(Amount in `) Sl. Particulars of Remuneration Name of Directors Total No 2 Other Non-executive Directors Shri Rajiv Bansal Shri Rajesh Aggarwal Dr. K. Ellangovan (Up to 07.01.2020) (w.e.f. 08.01.2020) For attending Board Committee meetings - - - - Commission - - - - Others, please specify - - - - Total (2) - - - - Total (B)= (1+2) - - - 48,80,000 Total Managerial Remuneration (A+B) 3,83,98,396 Overall ceiling as per the Act Provisions of Section 197 of the Companies Act, 2013 with respect to overall maximum managerial remuneration is not applicable to the Company being a Govt. Company as per MCA notification GSR 463(E) dated 05.06.2015. C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (Amount in `) Sl. Particulars of Remuneration Key Managerial Personnel Total No. CEO* Company Secretary CFO* M. Venugopal V. Kala (Up to 31.12.2019) (w.e.f. 13.02.2020) 1 Gross Salary (a) Salary as per provisions contained in section 62,51,702 4,30,003 66,81,705 17(1) of the Income Tax Act, 1961 (b) Value of perquisites under section 17(2) of the 17,78,085 2,06,106 19,84,191 Income Tax Act, 1961 (c) Profits in lieu of salary under section 17(3) of - - - the Income Tax Act, 1961 2 Stock option - - - 3 Sweat Equity - - - 4 Commission - as % of profit - - - - others, specify - - - 5 Others: Allowances/Contributions 25,47,131 1,03,200 26,50,331 Total 1,05,76,918 7,39,309 1,13,16,227 *C&MD and Director (Finance) are CEO and CFO respectively whose remuneration details are provided under VI A above.
158 Bharat Petroleum Corporation Limited VII. Penalties/Punishment/Compounding of Offences
Sl. Type Section of the Brief description Details of Authority (RD/ Appeal made, No. Companies Act Penalty/ NCLT/ COURT) if any (give Punishment / details) Compounding fees imposed A. Company Penalty Punishment Compounding B. Directors Penalty NIL Punishment Compounding C. Other Officers in default Penalty Punishment Compounding
ANNEXURE H Disclosure as required under Regulation 34, Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 Amount (` in Crores) Particulars Balance as on Maximum amount outstanding during the period 31.03.2020 31.03.2019 2019-20 2018-19 (a) Loans and advances in the nature of Loans: (i) To Subsidiary Company - Bharat 2,950.00 1,100.00 2,950.00 1,625.00 PetroResources Limited (ii) To Joint Ventures- Bharat Oman 1254.10 1254.10 1254.10 1254.10 Refineries Limited (iii) To Firms/Companies in which directors - - - - are interested (b) Investment by the loanee in the shares of - - - - BPCL and its subsidiary company
Annual Report 2019-20 159 ANNEXURE TO THE DIRECTORS’ REPORT
Annexure I FORM NO. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2020 [Issued in pursuance to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with modifications as deemed necessary, without changing the substance of format given in MR-3]
To, v. Wherever required, we have obtained the The Members, management representation pertaining to Bharat Petroleum Corporation Limited compliance of laws, rules and regulations, happening of events, etc. We have conducted the secretarial audit through electronic platform during the lock down period of the compliance vi. The compliance with the provisions of of applicable statutory provisions and the adherence Corporate and other applicable laws, rules, to good corporate practices by Bharat Petroleum regulations, standards is the responsibility Corporation Limited (CIN L23220MH1952GOI008931) of the management. Our examination was (hereinafter called the “Company”) for the financial year limited to the verification of procedures on ended 31st March, 2020. Secretarial Audit was conducted test basis. in a manner that provided us a reasonable basis for vii. The Secretarial Audit report is neither an evaluating the corporate conduct/statutory compliances assurance as to the future viability of the and expressing our opinion thereon. Company nor of the efficacy or effectiveness A. In expressing our opinion it must be noted that- with which the management has conducted the affairs of the Company. i. Maintenance of secretarial record is the responsibility of the management of the B. Based on our verification of the Company’s books, Company. Our responsibility is to express an papers, minute books, forms and returns filed and opinion on these secretarial records based other records maintained by the Company and on our audit. also the information provided by the Company, its officers, agents and authorized representatives ii. We have followed the audit practices and during the conduct of Secretarial Audit, we hereby processes as were appropriate to obtain report that in our opinion, the Company has, reasonable assurances about the correctness during the audit period covering the financial year of the contents of the secretarial records. The ended on 31st March, 2020, complied with the verification was done on test basis to ensure statutory provisions listed hereunder and also that that correct facts are reflected in secretarial the Company has proper Board-processes (duly records. We believe that the processes and evolved) and compliance-mechanism in place practices we followed provide a reasonable to the extent, in the manner and subject to the basis of our opinion. reporting made hereinafter: iii. We have not verified the correctness and C. We have examined the books, papers, minute appropriateness of the financial statements books, forms and returns filed and other records of the Company. maintained by the Company for the financial year iv. The Company being a Government ended on 31st March, 2020 according to the Company under the administrative control provisions of: of the Ministry of Petroleum & Natural Gas I. The Companies Act, 2013 (the Act) and the (MoP&NG), the power to appoint Directors rules made thereunder; (including Independent Directors) and the terms and conditions of such appointment, II. The Securities Contracts (Regulation) including remuneration and evaluation, vests Act, 1956 (‘SCRA’) and the rules made with the Government of India. thereunder;
160 Bharat Petroleum Corporation Limited III. The Depositories Act, 1996 and the Guidelines’) issued by the Department of Regulations and Bye-laws framed Public Enterprises. thereunder; VII. The following Acts and Rules made IV. Foreign Exchange Management Act, thereunder pertaining to oil and gas business, 1999 and the rules and regulations made as applicable to the Company: thereunder to the extent applicable to Foreign Direct Investment, Overseas Direct (a) Oil fields (Regulation and Investment and External Commercial Development) Act, 1948; Borrowings; (b) The Petroleum Act, 1934; V-A The following Regulations and Guidelines (c) Mines and Minerals (Regulation and prescribed under the Securities and Development) Act, 1957; Exchange Board of India Act, 1992 (‘SEBI Act’): (d) Petroleum and Minerals Pipelines (Acquisition of Right of User Inland) (a) The Securities and Exchange Board Act, 1962; of India (Substantial Acquisition of Shares and Takeovers) Regulations, (e) Oil Mines Regulations, 1984; 2011; (f) Petroleum & Natural Gas Rules, 1959; (b) The Securities and Exchange Board of (g) Petroleum Rules, 2002; India (Prohibition of Insider Trading) Regulations,2015; (h) The Oil Industry (Development) Act, (c) The Securities and Exchange Board of 1974; India (Registrar to an Issue and Share (i) The Energy Conservation Act, 2001; Transfer Agents) Regulations, 1993 regarding the Companies Act and (j) Petroleum & Natural Gas Regulatory dealing with client; and Board Act, 2006; and (d) The Securities and Exchange Board (k) Petroleum & Mineral Pipelines of India (Issue and Listing of Debt (Acquisition of Rights of User in Land) Securities) Regulations, 2008. Act, 1962. V-B The Company has not undertaken any of the We have also examined the compliance with regard activities during the audit period as envisaged to Secretarial Standards in respect of Meetings of in the following Regulations and Guidelines Board of Directors (SS-1) and General Meetings prescribed under the SEBI Act and hence are (SS-2) issued by the Institute of Company not relevant for the purpose of audit:- Secretaries of India. (a) The Securities and Exchange Board During the period under review, the Company has of India (Share Based Employee complied with the provisions of the Act, Rules, Benefits) Regulations, 2014; Regulations, Guidelines, Standards etc. mentioned (b) The Securities and Exchange Board above except to the extent as mentioned below: of India (Delisting of Equity Shares) a) The Company did not have: Regulations, 2009; (c) The Securities and Exchange Board 1. Woman Director on its Board pursuant of India (Buy-Back of Securities) to second proviso of sub-section Regulations, 2018; and (1) of Section 149 of the Act read with Companies (Appointment and (d) The Securities and Exchange Board of Qualification of Directors) Rules, India (Issue of Capital and Disclosure 2014 and Regulation 17(1)(a) of SEBI Requirements) Regulations, 2018. (Listing Obligations & Disclosure VI. Guidelines on Corporate Governance for Requirements) Regulations, 2015 for Central Public Sector Enterprises (‘CPSE the period 05.03.2020 to 31.03.2020.
Annual Report 2019-20 161 2. Optimum combination of executive IV. Due to technical reasons, the company is in and non-executive directors pursuant the process of filing Form IEPF 1 and IEPF to Regulation 17(1)(a) of SEBI 4 and due to non-availability of data, the (Listing Obligations & Disclosure company is in the process of filing few Form Requirements) Regulations, 2015 IEFP 1A for the period under review. and CPSE Guidelines for the period E. We further report that there are adequate systems 05.03.2020 to 31.03.2020. and process in the Company commensurate with 3. Sufficient number of Independent its size and operations to monitor and ensure Directors on its Board as required compliance with applicable laws, rules, regulations under the Regulation 17(1)(b) of and guidelines. SEBI(Listing Obligations & Disclosure F. I. We further report that during the audit period, Requirements) Regulations, 2015 and subsequent to conversion of warrants of CPSE Guidelines for the period under ` 650 Crores in Bharat Oman Refineries review i.e. 01.04.2019 to 31.03.2020 Limited (BORL) into equity shares in March, and pursuant to sub-section (4) of 2020, the Company’s shareholding in BORL Section 149 of the Act for the period increased from existing 50% to 63.38%. from 09.02.2020 to 31.03.2020. II. We further report that during the audit period, D. We further report that, none of the following events has taken place, I. The Board of Directors of the Company is except those mentioned above: duly constituted with proper balance of (i) Public/Rights/Preferential Issue of Executive Directors, Non-Executive Directors Shares/Sweat equity etc. and Independent Directors except to the extent as mentioned above. The changes in (ii) Redemption/Buy Back of securities. the composition of the Board of Directors (iii) Major decisions taken by the members that took place during the period under in pursuance to Section 180 of the review were carried out in compliance with Companies Act, 2013. the provisions of the Companies Act, 2013. (iv) Merger/reconstruction etc. II. Adequate notice is given to all directors to schedule the Board Meetings, agenda and (v) Foreign Technical Collaborations. detailed notes on agenda were sent well in advance, and a system exists for seeking For DHOLAKIA & ASSOCIATES LLP and obtaining further information and (Company Secretaries) clarifications on the agenda items before the meeting and for meaningful participation at Sd/- the meeting. CS Bhumitra V. Dholakia III. As per the minutes of the Board duly recorded Designated Partner and signed by the Chairman, the agenda FCS-977 CP No. 507 items are deliberated and decisions of the Place : Mumbai Board were unanimous and no dissenting Date : 10th July, 2020 views have been recorded. UDIN : F000977B000438911
162 Bharat Petroleum Corporation Limited ANNEXURE TO THE DIRECTORS’ REPORT
Annexure J DIVIDEND DISTRIBUTION POLICY PREAMBLE: The shares of Bharat Petroleum Corporation Limited (the “Company”) are listed on the National Stock Exchange of India Limited, Mumbai and BSE Limited, Mumbai. SEBI vide its notification dated 08.07.2016 has inserted Regulation 43A in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which requires top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) to formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites. The Board of Directors of the Company (“the Board”) has approved the Dividend Distribution Policy of the Company (“the policy”). OBJECTIVE The Company aims at maximisation of shareholder value and believes that this can be attained by driving growth. The policy endeavours to strike an optimum balance between rewarding shareholders through dividend and ensuring that sufficient profits are retained for growth of the Company and other needs. The objective of the policy is to lay down a consistent approach to dividend declaration. PARAMETERS FOR DIVIDEND DISTRIBUTION l The Company has only one class of shares i.e. Equity shares and hence, the parameters disclosed hereunder apply to the same. l The Board, while considering payment of dividend for a financial year may, inter-alia, consider the following factors:- Profit for the financial year as well as general reserves of the Company. Projections of future profits and cash flows. Borrowing levels and the capacity to borrow including repayment commitments. Present and future capital expenditure plans of the Company including organic/inorganic growth avenues. Applicable taxes including tax on dividend. Compliance with the provisions of the Companies Act or any other statutory guidelines including guidelines issued by the Govt. of India. Past dividend trends for the Company and the industry. State of the economy and capital markets. Any other factor as may be deemed fit by the Board. l The profits for a year may be adjusted at the discretion of the Board, for the purpose, to exclude exceptional or one off items or non-cash items resulting from change in law, accounting policies, accounting standards or otherwise. l The Company would endeavor to pay minimum annual dividend of 30% of Profit after Tax (PAT) or 5% of net worth, whichever is higher, subject to the maximum dividend permitted under the extant legal provisions. l In case of deviation, if any, in a particular year due to inadequacy or absence of profits/reserves or otherwise, the reasons and justification thereof shall be disclosed to the shareholders through the Annual Report of the Company. l The Company is committed to continuous growth and has plans requiring significant capital outlay. The retained earnings, after distribution of dividend, shall primarily be utilized towards this purpose. l Dividend shall be recommended by the Board for approval of shareholders of the Company for payment. However, the Board may also consider payment of interim dividend as and when it feels appropriate. GENERAL l In the event of the policy being inconsistent with any new regulatory provision, such regulatory provision shall prevail upon the corresponding provision of this policy and the policy shall be construed to be amended accordingly from the effective date of such provision. l The Company reserves its right to alter, modify, add, delete or amend any or all of the provisions of the policy as it may deem fit or in accordance with the guidelines as may be issued by SEBI, Government of India or any other regulatory authority. The change in the policy shall, however, be disclosed alongwith the justification thereof on the Company’s website and in the ensuing Annual Report in accordance with the extant regulatory provisions.
Annual Report 2019-20 163 PERFORMANCE PROFILE
Particulars 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 1. Refinery Thruput (TMT) Imported 27,447 26,139 23,795 20,421 18,028 17,661 16,761 17,155 16,353 14,769 Indigenous 4,464 4,867 4,746 4,970 6,088 5,694 6,590 6,050 6,559 7,015 TOTAL 31,911 31,006 28,541 25,391 24,115 23,355 23,351 23,205 22,912 21,784 2. Production Quantity (TMT) 30,240 29,340 26,946 24,206 22,965 22,149 22,052 21,843 21,522 20,547 Light Distillates % 30.99 28.85 29.50 30.05 28.90 27.93 29.19 28.52 28.91 29.83 Middle Distillates % 58.21 58.13 59.58 59.83 60.27 59.65 57.02 56.26 55.42 55.46 Heavy Ends % 10.80 13.02 10.93 10.12 10.83 12.42 13.78 15.22 15.68 14.71 3. Fuel and Loss as % of 5.2 5.4 5.6 4.7 4.8 5.2 5.6 5.9 6.1 5.7 Refinery Throughput * 4. Market Sales (MMT) 43.10 43.07 41.21 37.68 36.53 34.45 34.00 33.30 31.14 29.27 5. Lubricants Production (MT) 322,450 247,910 327,049 293,791 295,509 287,649 258,112 258,586 217,851 220,387 6. Market Participation % 24.5 24.5 23.8 22.8 22.9 23.3 23.5 23.1 22.4 22.5 7. Marketing Network Installations 15 14 13 13 13 13 12 12 12 12 Depots 108 109 110 115 118 114 116 115 115 114 Aviation Service Stations 58 56 50 43 40 35 34 36 36 31 Total Tankages (Million KL) 3.95 4.02 3.95 3.70 3.60 3.52 3.49 3.44 3.43 3.39 Retail Outlets 16,234 14,802 14,447 13,983 13,439 12,809 12,123 11,637 10,310 9,289 LPG Bottling Plants 52 52 51 51 50 50 50 50 49 49 LPG Distributors 6,110 5,907 5,084 4,684 4,494 4,044 3,355 2,949 2,658 2,452 LPG Customers (No. Million) 83.42 78.33 66.63 60.60 50.6 45.8 41.2 37.4 34.5 31.1 8. Manpower (Nos.) 11,249 11,971 12,019 12,484 12,623 12,687 13,214 13,213 13,343 13,837 9. Sales and Earnings (` Crores) i) Sales and Other Income 330,372 339,693 279,447 243,464 218,072 247,552 253,492 229,796 203,866 154,886 (excluding subsidy) ii) Gross Profit before 9,721 14,948 14,772 13,430 12,801 10,515 9,555 7,787 5,569 5,167 Depreciation, Interest, Exceptional items & Tax iii) Depreciation 3,787 3,189 2,653 1,891 1,845 2,516 2,247 1,926 1,885 1,655 iv) Interest 2,182 1,319 833 496 565 583 1,359 1,825 1,800 1,117 v) Exceptional items 1,081 ------vi) Profit before Tax 2,671 10,440 11,286 11,043 10,391 7,416 5,949 4,036 1,884 2,395 vii) Tax (12) 3,308 3,310 3,004 3,335 2,331 1,888 1,393 573 848 viii) Profit after Tax 2,683 7,132 7,976 8,039 7,056 5,085 4,061 2,643 1,311 1,547 10. What the Company Owned (` Crores) i) Gross Property, Plant 79,290 62,858 53,594 46,761 37,700 49,475 41,229 36,095 32,846 30,307 and Equipment (including Right-of-use, Capital Work-in-Progress and Investment Property) ii) Net Property, Plant and 66,456 53,554 47,436 43,060 35,872 27,981 22,105 19,110 17,732 16,972 Equipment (including Right-of-use, Capital Work-in-Progress and Investment Property) iii) Net Current Assets 3,604 4,866 878 151 (65) (991) 9,584 14,690 13,612 9,715 iv) Non-Current Assets 18,950 15,436 15,693 14,672 11,283 11,463 10,671 9,482 8,430 8,113 Total Net Assets 89,010 73,856 64,007 57,883 47,090 38,453 42,360 43,282 39,774 34,800 (ii + iii+ iv)
164 Bharat Petroleum Corporation Limited PERFORMANCE PROFILE (contd.)
Particulars 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 11. What the Company Owed (` Crores) i) Share Capital @ 1,967 1,967 1,967 1,311 656 723 723 723 362 362 ii) Other Equity 31,248 34,771 32,165 28,357 26,667 21,744 18,736 15,911 14,552 13,696 iii) Total Equity ( i +ii ) 33,215 36,738 34,131 29,668 27,323 22,467 19,459 16,634 14,914 14,058 iv) Borrowings** 41,875 29,099 23,351 23,159 15,857 13,098 20,322 23,839 22,994 18,960 v) Lease Liability 5,943 ------vi) Deferred Tax Liability 5,967 6,169 4,956 3,502 2,622 1,708 1,361 1,656 1,401 1,008 (net) vii) Non- Current Liabilites 2,010 1,850 1,569 1,554 1,288 1,180 1,218 1,153 465 774 Total Funds Employed 89,010 73,856 64,007 57,883 47,090 38,453 42,360 43,282 39,774 34,800 (iii + iv + v +vi+vii) 12. Internal Generation 1,133 7,449 8,759 4,723 6,516 5,989 4,586 4,002 3,135 2,759 (` Crores) 13. Value Added (` Crores) 25,703 30,888 28,318 25,903 24,885 20,569 20,855 17,638 14,837 12,926 14. Earnings in Foreign 15,168 13,220 10,371 10,152 7,138 12,364 19,122 18,456 19,316 12,380 Exchange (` Crores) 15. Ratios i) Gross Profit before Depreciation, Interest, 2.9 4.4 5.3 5.5 5.9 4.1 3.5 3.1 2.5 3.1 Exceptional items & Tax as % age of Sales and Other Income ii) Profit after Tax as % age 7.7 20.1 25.0 28.2 28.3 24.3 22.5 16.8 9.1 11.4 of average Total Equity iii) Gross Profit before Depreciation, Interest, 13.6 23.1 25.5 30.1 38.9 36.1 25.4 19.7 14.6 15.7 Exceptional items & Tax as % age of Capital Employed** iv) Profit before Tax 3.7 16.1 19.5 24.8 31.6 25.5 15.8 10.2 4.9 7.2 as % age of Capital Employed** v) Profit After Tax as % age 3.8 11.0 13.8 18.0 21.4 17.5 10.8 6.7 3.4 4.7 of Capital Employed ** vi) Debt Equity Ratio** 1.26 0.79 0.68 0.78 0.58 0.58 1.04 1.43 1.54 1.35 16. Earnings per Share (`) # 13.64 36.26 40.55 40.87 35.88 23.44 18.72 12.18 6.04 7.13 17. Book Value per Share (`) # 168.87 186.78 173.53 150.84 138.92 103.57 89.70 76.68 68.75 64.80 18. Dividend^ i) Percentage 165 190 210 325 310 225 170 110 110 140 ii) Amount (` Crores) 3,579 4,122 4,555 4,700 2,242 1,627 1,229 795 398 506 Note: The figures from 2015-16 onwards are as per Indian Accounting Standards (Ind AS) * The Figures of Fuel & Loss reported do not include the external fuel used in Refineries @ The share capital from 2015-16 onwards is after adjustment of BPCL Trust for Investment in Shares. # Adjusted for bonus shares issued ^ Dividend includes proposed dividend ** Excluding Lease liabilities as per Ind AS 116.
Annual Report 2019-20 165 ------2 71 50 506 235 570 148 3,222 6,331 2,532 6,331 2,124 1,655 1,547 2010-11 ` in Crores ------57 63 398 613 393 461 5,531 8,748 2,762 8,748 4,022 1,885 1,311 2011-12 ------900 127 795 236 653 845 255 1,192 6,558 3,544 6,558 1,926 2,643 2012-13 ------5 19 197 904 262 184 (295) 3,517 1,229 5,553 3,109 2,247 4,061 10,496 10,496 2013-14 ------3 851 294 157 347 (28) 7,224 1,627 8,494 9,533 1,183 2,524 5,085 18,647 18,647 2014-15 ------12 38 148 497 106 260 588 (93) (182) 2,784 9,946 1,124 2,864 1,838 7,056 13,493 13,493 2015-16 ------52 998 526 183 880 286 (51) 3,244 1,790 5,640 9,128 1,695 7,302 1,888 8,039 20,800 20,800 2016-17 ------54 24 420 140 147 191 297 (15) (78) 2,113 1,025 3,182 7,123 1,405 1,454 2,653 7,976 14,056 14,056 2017-18 ------96 770 648 139 364 (64) (40) (138) 4,374 3,905 9,633 1,881 5,749 1,213 3,189 7,132 19,426 19,426 2018-19 ------29 254 911 496 149 919 (185) (313) (202) 5,943 3,787 2,683 2,755 5,315 7,231 9,810 12,776 26,179 26,179 2019-20 Note: The figures from 2015-16 onwards are as per Indian Accounting Standards (Ind AS). Total Increase in current / non-current items Investment (net) Repayment of Loans (net) Tax on distributed profits Dividend (incl interim dividend) Foreign Exchange loss debited to Currency Monetary Item Translation Difference Account (including amortization) Addition in Net Block of assets due to PCCKL merger Right-of-Use Asset APPLICATION OF FUNDS Capital Expenditure Total Adjustment on account of Deletion/Re-classification, etc. Decrease in current / non-current items Deposits for container Lease Liability BORROWINGS Loans (net) Remeasurement of defined benefit plan Income from BPCL trust for investment in shares Equity instruments through OCI Deferred Tax Provision Investment (net) Depreciation Adjustment on account of Transitional Provisions Capital Grants received / (Reversed) (net of amortization) Foreign Exchange Gain credited to Currency Monetary Item Translation Difference Account (net of amortization) SOURCES OF FUNDS OWN Profit after Tax Particulars S ources and A pplication of F unds
166 Bharat Petroleum Corporation Limited Sales Volume (TMT)
2019-20 2018-19 2017-18 2016-17 2015-16
Sales Market Sales Market Sales Market Sales Market Sales Market Share Share Share Share Share (%) (%) (%) (%) (%)
Light Distillates :
Naphtha 885 26.6 428 20.0 348 6.7 177 3.6 104 2.2
LPG (Bulk & Packed) 6,870 25.9 6,491 26.0 5,986 26.3 5,449 25.9 4,874 25.7
Motor Spirit 7,808 28.7 7,428 28.6 6,980 28.7 6,412 28.5 6,011 28.5
Special Boiling Point Spirit/Hexane 41 46.9 41 49.5 36 54.4 30 50.7 28 46.5
Benzene 68 28.8 94 34.9 62 28.6 48 23.5 46 23.5
Toluene 28 100.0 31 100.0 17 100.0 22 100.0 19 100.0
Polypropylene Feedstock 194 63.8 148 58.3 97 39.6 94 35.1 105 38.3
Regasified - LNG 782 6.5 1,292 10.8 1,312 9.5 967 7.1 718 6.5
Others 504 31.0 482 33.0 417 33.4 376 34.8 356 21.8
Sub Total 17,180 16,435 15,255 13,575 12,261
Middle Distillates :
Aviation Turbine Fuel 2,005 26.4 1,990 25.9 1,790 25.6 1,547 25.0 1,283 22.8
Superior Kerosene Oil 398 15.1 602 16.1 664 16.2 903 16.0 1,100 15.6
High Speed Diesel 19,864 26.9 20,421 26.9 20,094 27.0 19,097 26.7 19,354 26.8
Light Diesel Oil 139 23.0 128 22.1 112 21.5 106 23.6 90 22.0
Mineral Turpentine Oil 86 45.2 94 50.0 93 54.1 89 60.2 87 61.3
Sub Total 22,492 23,235 22,753 21,742 21,914
Others :
Furnace Oil 626 13.6 690 13.7 695 12.7 783 13.5 742 13.6
Low Sulphur Heavy Stock 11 3.2 6 1.9 20 20.3 51 48.5 80 53.5
Bitumen 741 14.8 903 15.9 790 16.2 636 13.5 779 16.2
Petcoke 1,321 23.4 1,193 20.7 1,046 20.2 422 10.8 291 8.5
Lubricants 306 22.8 238 17.7 320 23.2 293 21.5 322 24.3
Others 427 15.9 367 14.4 331 13.8 182 9.6 145 19.4
Sub Total 3,432 3,397 3,202 2,367 2,359
Grand Total 43,104 24.52 43,067 24.49 41,210 23.75 37,684 22.77 36,534 22.94
Note : Market Share is based on Sales Volumes of Public Sector Oil Companies.
Annual Report 2019-20 167 PRODUCTION (TMT)
Particulars 2019-20 2018-19 2017-18 2016-17 2015-16 Light Distillates : Naphtha 1,854 1,291 1,468 1,405 1,135 LPG 1,529 1,488 1,403 1,099 1,048 Motor Spirit 5,646 5,364 4,850 4,517 4,207 Special Boiling Point Sprit/Hexane 42 41 37 32 28 Benzene 68 92 73 93 95 Toluene 29 32 17 23 18 Polypropylene Feedstock/ Propylene 198 147 99 94 104 Ind. Reformate - - - 5 - Others 6 9 2 5 1 Sub Total 9,372 8,464 7,949 7,274 6,636
Middle Distillates: Aviation Turbine Fuel 1,520 1,721 1,613 1,479 1,284 Superior Kerosene Oil 187 342 344 449 534 High Speed Diesel 15,403 14,529 13,597 11,932 11,579 Light Diesel Oil 135 212 106 264 91 Mineral Turpentine Oil 88 93 93 95 83 Lube Oil Base Stock 269 159 262 255 270 Others - - 38 11 - Sub Total 17,602 17,056 16,053 14,484 13,841
Heavy Ends : Petcoke 921 983 687 - - Furnace Oil 1,195 1,393 1,099 1,698 1,537 Low Sulphur Heavy Stock 7 8 25 39 81 Sulphur 283 273 215 82 89 Bitumen 761 914 807 623 781 Others 99 249 111 7 - Sub Total 3,266 3,820 2,944 2,449 2,488 Grand Total 30,240 29,340 26,946 24,206 22,965
Lubricants Production (MT) 2019-20 2018-19 2017-18 2016-17 2015-16 322,450 247,910 327,049 293,791 295,509
Quantity of LPG Filled in Cylinders (MT) 2019-20 2018-19 2017-18 2016-17 2015-16 6,518,908 6,099,995 5,673,579 5,128,580 4,616,172
168 Bharat Petroleum Corporation Limited HOW VALUE IS GENERATED ` in Crores
Particulars 2019-20 2018-19 Value of Production (Refinery) 117,296 125,428 Less : Direct Materials Consumed (113,652) (120,030) Added Value 3,644 5,398
Marketing Operations 18,978 22,506
Value added by Manufacturing & Trading Operations 22,622 27,904 Add : Other Income and prior period items 3,081 2,984
Total Value Generated 25,703 30,888
HOW VALUE IS DISTRIBUTED ` in Crores
Particulars 2019-20 2018-19 OPERATIONS Operating & Service Costs 13,372 12,277
EMPLOYEES' BENEFITS Salaries, Wages & Bonus 2687 2,821 Other Benefits 1004 3,691 843 3,664
PROVIDERS OF CAPITAL Interest on Borrowings 2182 1,319 Dividend after netting off Trust shares 4819 7,001 3,540 4,859
INCOME TAX & DIVIDEND TAX 506 2,639
RE-INVESTMENT IN BUSINESS Depreciation 3,787 3,189 Deferred Tax 401 1,316 Retained Profit/(loss) (including Debenture Redemption Reserves) (3,055) 1,133 2,944 7,449
Total Value Distributed 25,703 30,888
Annual Report 2019-20 169 Standalone Financial Statements INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF BHARAT PETROLEUM CORPORATION LIMITED Report on the Audit of the Standalone Ind AS Financial Statements Opinion 1. We have audited the accompanying standalone Indian Accounting Standards (“Ind AS”) financial statements of Bharat Petroleum Corporation Limited (“the Corporation”), which comprise the Balance Sheet as at 31st March 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the Standalone Ind AS Financial Statements”). 2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Corporation as at 31st March 2020, the profit and total comprehensive income, its cash flows and changes in equity for the year ended on that date. Basis for Opinion 3. We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing (“SAs”) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Ind AS Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements. Emphasis of Matter 4. We draw attention to Note No. 71 in the Standalone Ind AS Financial Statements, which describes the economic consequences/disruption the Corporation is facing as a result of COVID-19 pandemic, which is impacting consumer demand, financial markets, commodity prices and inventory valuation. Our opinion is not modified in respect of this matter. Key Audit Matters 5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters:
Annual Report 2019-20 171 S. No. Key Audit Matter Auditors’ Response 1. Computation of Expected Credit Loss (ECL): Trade receivables and loans granted under Our audit approach consisted testing of the design and operating the Pradhan Mantri Ujjwala Yojana (PMUY) effectiveness of the internal controls and substantive testing as scheme constitute a significant component follows: of the total current assets of the Corporation. • In respect of loans granted under PMUY, the corporation At each reporting date, the Corporation along with other few industry peers have derived a common recognizes Lifetime ECL on Trade methodology based on the broad category of active and Receivables using a ‘simplified approach’ inactive consumers and last refill date with expected loan and 12 month ECL on loans granted recovery period. We checked the working of the same and it under the PMUY scheme, which rely was in line with the common draft methodology document on Management’s estimates regarding shared with us. probability of default rates linked to age- • We have evaluated the methodology for age-wise bucketing wise bucketing of the corresponding asset. of trade receivables and key assumptions underlying the The COVID-19 pandemic may also have an probability of default estimates on the same, to ascertain impact on the Management’s estimate of that the same were broadly in-line with the Corporation’s probability of default as on 31st March 2020 historical default rates and have considered available information regarding the current economic scenario. • We selected a few sample outstanding receivable cases having different overdue period and checked if the computation of ECL is appropriate in-line with the Corporation’s policy. 2. Investments in E&P Subsidiary: The Corporation has an investment of The following procedures were carried out in this regard: ` 5,494.41 Crores in 100% subsidiary • We evaluated the design and implementation of key controls Bharat Petro Resources Ltd (BPRL). in relation to the impairment testing carried out by the This subsidiary alongwith its step down Corporation for the investment in E&P subsidiary. subsidiaries, JVs & Associates holds • We reviewed the audited Consolidated Ind AS Financial participating interest in various oil/ gas blocks Statements of BPRL and the independent auditor’s report for exploration & evaluation, development thereon to ascertain if there are any signs of impairment in and production activities (E&P). the Corporation’s investments therein. The Corporation’s realization from these E&P investments is dependent on the continued successful operations/ development of reserves resulting in expected earnings and revenue growth of the respective companies. The sharp global reduction in crude oil prices towards the end of FY 2019-20 triggered by the COVID-19 pandemic, may also impact the estimated revenue of these entities and hence the Corporation’s realization from E&P Investments.
172 Bharat Petroleum Corporation Limited S. No. Key Audit Matter Auditors’ Response 3. Evaluation of Contingent Liabilities: The Corporation has material uncertain • We examined sample items above the threshold limit for positions including matters under dispute recognition of contingent liabilities and obtained details of which involves significant judgment to completed Excise, VAT/ Sales Tax/ Entry Tax assessments determine the possible outcome of these and demands as on 31st March 2020. In FY 2019-20, due to disputes. Contingent liabilities are not various tax dispute settlement schemes, the Corporation has recognized in the Standalone Ind AS opted for dispute settlement in VAT/Sales tax related cases Financial Statements but are disclosed in many states and obtained opinion from tax consultants unless the possibility of an outflow of in various matters. We have relied upon such opinions economic resources is considered remote. where remote possibility of cash outflow is indicated and the Contingent liabilities disclosed are in respect Corporation has considered the same while preparation of of items which in each case are above the the Standalone Ind AS Financial Statements. threshold limit. • We have assessed the Management’s underlying assumptions in estimating the possible outcome of the disputes. We also considered legal precedence and other rulings in evaluating Management’s position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions at beginning of the financial year to evaluate whether any change was required to Management’s position on these uncertainties. 4. Inventories: Because of implementation of lockdown by • Since physical verification was not possible for us, we have Government due to outbreak of COVID-19, relied on the physical verification of inventory carried out by physical verification of the inventories was the Management. We also evaluated the system of inventory not possible during the course of audit. monitoring and control and reviewed data regarding sale of Verification and valuation of Inventories is finished goods for sample regions during April 2020. The a significant area requiring Management’s physical verification of inventory has been conducted by the judgment of estimates and application of management at regular intervals. accounting policies that have significant • In respect of inventory lying with third parties, we have effect on the amounts recognized in the ascertained that these have substantially been confirmed by Standalone Ind AS Financial Statements. them. We examined the system for records maintenance for stocks lying at third party locations. • We have also tested the values considered in respect of Net realizable value, cost of products and verified these with the inventory valuation and accounting entries posted in this regard.
Annual Report 2019-20 173 S. No. Key Audit Matter Auditors’ Response 5. Property, Plant & Equipment: Estimates of useful lives and residual • We examined whether the Corporation has maintained proper value of Property, Plant and Equipment is records showing full particulars, including quantitative details a significant area requiring Management and situation of fixed assets. judgment of estimates and application of • The physical verification of Property, Plant and Equipment accounting policies that have significant (except LPG Cylinders and pressure regulators with effect on the amounts recognized in the customers) has been carried out by the Management in Standalone Ind AS Financial Statements. accordance with the phased program of verification of all assets and necessary accounting entries based on such physical verification has been appropriately posted which were reviewed by us. • Changes in the useful life of class of assets was adopted based on detailed internal evaluation and was also comparable with other entities in the same industry. We have tested the computation of depreciation on sample basis. Information Other than the Standalone Ind AS Financial Statements and Auditors’ Report Thereon 6. The Corporation’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the Standalone Ind AS Financial Statements and our audit report thereon. 7. Our opinion on the Standalone Ind AS Financial Statements does not cover the other information and we do not express any form of assurance thereon. 8. In connection with our audit of the Standalone Ind AS Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. 9. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Management’s Responsibility for the Standalone Ind AS Financial Statements 10. The Corporation’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, cash flows and changes in equity of the Corporation in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. 11. In preparing the Standalone Ind AS Financial Statements, management is responsible for assessing the Corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so. 12. The Corporation’s Board of Directors management is responsible for overseeing the Corporation’s financial reporting process.
174 Bharat Petroleum Corporation Limited Auditors’ Responsibilities for the Audit of the Standalone Ind AS Financial Statements 13. Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Ind AS Financial Statements. 14. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Corporation has adequate internal financial controls system in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the Standalone Ind AS Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements, including the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. 15. Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements. 16. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 17. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 18. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Annual Report 2019-20 175 Report on Other Legal and Regulatory Requirements 19. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of such checks of the books and records of the Corporation, as we considered appropriate and according to the information and explanations given to us, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable. 20. As required by Section 143(5) of the Act, we give in “Annexure B”, a statement on the matters specified by the Comptroller and Auditor-General of India for the Corporation. 21. As required by Section 143(3) of the Act, based on our audit we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books. c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account. d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act. e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Corporation; f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate Report in “Annexure C”. g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its standalone Ind AS Financial Statements. (Refer Note No. 63 of the Standalone Ind AS Financial Statements) ii. The Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.
For CVK & Associates For Borkar & Muzumdar Chartered Accountants Chartered Accountants ICAI FRN 101745W ICAI FRN 101569W
Sd/- Sd/- A K Pradhan Kaushal Muzumdar Partner Partner Membership No. 032156 Membership No. 100938 UDIN: 20032156AAAAAG3907 UDIN: 20100938AAAAAS9538 Place: Mumbai Date: 03rd June, 2020
176 Bharat Petroleum Corporation Limited ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT
[Referred to in paragraph 19 under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditors’ Report of even date to the members of Bharat Petroleum Corporation Limited (“the Corporation”) on the Standalone Ind AS Financial Statements as of and for the year ended 31st March 2020] (i) (a) The Corporation has maintained proper records showing full particulars, including quantitative details and situation of fixed assets; (b) As per information and explanations given to us, physical verification of fixed assets (except LPG Cylinders and pressure regulators with customers) has been carried out by the Management during the year in accordance with the phased programme of verification of all assets over three years which, in our opinion, is reasonable having regard to the size of the Corporation and the nature of its assets. As informed, no material discrepancies were noticed on such verification; (c) According to the information and explanations given to us and on the basis of our examination of the records of the Corporation, the title deeds of immovable properties are held in the name of the Corporation, except in cases given below:
Number of Net Block Particulars Remarks Cases (` in Crores) Freehold Land 9 84.59 Documents of title not available for verification Documents of title lying with registration Freehold Land 10 7.75 authorities, as informed Freehold Land 13 339.06 Mutation Pending, as informed
(ii) The inventory (excluding stocks with third parties and goods in transit) has been physically verified by the Management during the year at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. No material discrepancies were noticed on physical verification of inventories carried out at the end of the year; (iii) As informed, the Corporation has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable; (iv) In our opinion and according to the information and explanations given to us, the Corporation has complied with the provisions of Section 185 and Section 186 of the Act, with respect to the loans, investments, guarantees and securities; (v) In our opinion and according to the information and explanations given to us, the Corporation has not accepted any deposits from public within the provisions of Sections 73 to 76 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014 and other relevant provisions of the Act; (vi) We have broadly reviewed the books of account maintained by the Corporation in respect of products where the maintenance of cost records has been specified by the Central Government under Section 148(1) of the Act and the rules framed there under and we are of the opinion that prima-facie, the prescribed books of account and cost records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate or complete; (vii) (a) The Corporation is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income-Tax, Sales-Tax, Goods and Service tax (GST), Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it; According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-Tax, Sales-Tax, GST, Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it, were outstanding, as on the last day of the financial year, for a period of more than six months from the date they became payable;
Annual Report 2019-20 177 (b) According to the information and explanation given to us, the dues outstanding with respect to income- tax, sales-tax, service tax, duty of customs, duty of excise, value added tax have not been deposited on account of any dispute, are as per Statement 1; (viii) According to the information and explanations given to us, the Corporation has not defaulted in repayment of loans or borrowing to financial institutions, banks, government or dues to debenture holders; (ix) The Corporation did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. According to the information and explanations given to us, money raised by way of term loans during the year have been applied for the purpose for which those were raised; (x) During the course of our examination of the books and records of the Corporation, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, no instances of fraud by the Corporation or on the Corporation by its officers and employees have been noticed or reported during the year, except for an incident as reported by Management by way of excess filling of Petroleum Products in Tank Lorries, which was reported at one of the Retail locations during the year. Due to nature of transaction involving flow calibration, we are informed that a formal letter was issued to automation vendor and subsequently, recovery of ` 0.99 crore was made from his dues. Further, we understand that disciplinary action is also being initiated on the concerned officers. (xi) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the Corporation. Accordingly, paragraph 3(xi) of the Order is not applicable; (xii) In our opinion and according to the information and explanations given to us, the Corporation is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable; (xiii) According to the information and explanations given to us and based on our examination of the records of the Corporation, all transactions entered into by the Corporation with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Standalone Ind AS Financial Statements, as required by the applicable Indian Accounting Standards; (xiv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable; (xv) According to the information and explanations given to us and based on our examination of the records, the Corporation has not entered during the year into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable; (xvi) The Corporation is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
For CVK & Associates For Borkar & Muzumdar Chartered Accountants Chartered Accountants ICAI FRN 101745W ICAI FRN 101569W
Sd/- Sd/- A K Pradhan Kaushal Muzumdar Partner Partner Membership No. 032156 Membership No. 100938 UDIN: 20032156AAAAAG3907 UDIN: 20100938AAAAAS9538 Place: Mumbai Date: 03rd June,2020
178 Bharat Petroleum Corporation Limited Statement 1 (Refer Clause vii (b) of Annexure A)
` in Crores S. No. Name of the Nature of Dues Forum Where Dispute is Amount Period block Statute pending to which it relates^ 1. Central Excise Duty, interest and penalty for Supreme Court 2,916.53 2000 to 2010 Act, 1944 cases relating to Determination High Court 28.57 1995 to 2015 of Assessable value, Cenvat Appellate Tribunal * 13,766.79 1990 to 2020 Credit etc. Appellate Authority ** 51.85 1995 to 2020 Total 16,763.74 2. Customs Act, Duty, interest and penalty for Appellate Tribunal * 4.25 2005 to 2010 1962 cases relating to Determination of Valuation etc. 3. Income Tax Tax, interest and penalty Appellate Authority ** 502.64 2005 to 2019 Act, 1961 demands towards various Income tax disputes 4. Sales Tax/Vat Tax, interest and penalty Supreme Court 7.37 1995 to 2005 Legislations demand towards Sales tax/VAT High Court 681.83 1980 to 2020 disputes Appellate Tribunal * 3,681.76 1985 to 2015 Appellate Authority ** 1,224.28 1985 to 2020 Adjudicating Authority *** 9.36 2010 to 2015 Total 5,604.60 5. Finance Duty, interest and penalty for Supreme Court 34.15 2005 to 2015 Act,1994 cases relating to Service tax High Court 22.30 2000 to 2010 (Service Tax) disputes Appellate Tribunal * 20.36 2005 to 2015 Appellate Authority ** 8.53 2000 to 2020 Total 85.34 Grand Total 22,960.57 Remarks Dues Include Penalty & Interest, wherever applicable * Appellate Tribunal includes Sales Tax Tribunal, CESTAT and ITAT. ** Apellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals. *** Adjudicating Authority includes Collector of Sales Tax, Sales Tax Officer and Deputy Commissioner Sales Tax, Joint / Deputy/ Additional Commissioner of Commercial Taxes etc ^ Period block shall indicate the period interval in which all the disputes under that authority have taken place.
Annual Report 2019-20 179 ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT
[Referred to in paragraph 20 under “Report on Other Legal and Regulatory Requirements” in the Independent Auditors’ Report of even date to the Members of Bharat Petroleum Corporation Limited (“the Corporation”) on the Standalone Ind AS Financial Statements as of and for the year ended 31st March 2020]
Directions for the year 2019-20 1. Area examined Whether the company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated. Observations/ The Corporation has a system in place to process all the accounting transactions Findings through its implemented IT system, SAP. As such, we have not come across any accounting transactions processed outside IT system which would have an impact on the integrity of the accounts or any financial implications. 2. Area examined Whether there is any restructuring of an existing loan or cases of waiver/write off of debts /loans/interest etc. made by a lender to the company due to the company’s inability to repay the loan? If yes, the financial impact may be stated. Observations/ Based on our examination of relevant records of the Corporation and the information Findings and explanations received from the Management, there were no cases of restructuring of an existing loan or cases of waiver/write off of debts/loans / interest by any of the lenders of the Corporation due to inability to repay the loan. 3. Area examined Whether funds received/receivable for specific schemes from central/ state agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation. Observations/ Based on our examination of relevant records of the Corporation and the information Findings and explanations received from the Management, Funds received/receivable for specific schemes from central/state agencies were properly accounted for/utilized as per terms and conditions and applicable Ind AS. Sub-directions for the year 2019-20 1. Area examined Whether any investments have been made by BPCLs Provident Fund and Post- Retirement Medical Fund (PRMF) trust in IL&FS? If so, the exposure and liabilities of the Company in the capacity of Principal Employer and probability of liabilities in future years with regard to exposure for investments made in IL&FS or group Companies by BPCL PF Trust and BPCL PRMB Trust. Observations/ Yes, investments of ` 112.90 Crores and ` 40 Crores have been made by BPCL’s Findings Provident Fund and Post- Retirement Medical Fund Trust respectively, in IL&FS Group companies as on 31st March 2020. Interest accrued of ` 28.33 Crores on above investments has not been recognized in the books of respective trusts due to defaults in payment by the above Group. As a Principal Employer, the Corporation has accounted a liability by way of provision of ` 79.03 Crores towards impairment of the above investments for the PF Trust as on 31st March 2020 to meet the shortfall. The maximum amount of liabilities in future years with regards to exposure for above investments in PF Trust after considering above provision could be ` 33.87 Crore.
180 Bharat Petroleum Corporation Limited 2. Area examined In view of initiation of process of disinvestment of the Company by DIPAM, the following may be reported upon: As per the practice the management is carrying out physical verification of assets in phased manner over the three years’ period. To confirm the existence of assets as on date of disinvestment, Whether proper physical verification of assets carried out by the management before the finalization of disinvestment process? Observations/ As informed by the Management, The CCEA, in its meeting held on 20.11.2019, Findings has accorded ‘in principle’ approval for Strategic disinvestment of Government of India shareholding in BPCL excluding BPCL’s shareholding in NRL which has to be divested to a CPSE operating in the Oil & Gas Sector. Further, Department of Investment and Public Asset Management (DIPAM), to take forward the decision of CCEA, has appointed Transaction Advisor, Legal advisor and Asset Valuer. The Asset Valuer was engaged to carry out a diligent and fair valuation of BPCL for the limited purpose of its disinvestment. Tender document available in public domain do not include physical verification of the assets as part of the scope of work of Asset Valuer. Further,as informed, till date, no communication with regard to carrying mandatory physical verification has been received by BPCL from DIPAM for the purpose of disinvestment. However, physical verification of assets has been carried out by the Management during the year as per the normal phased programme of the Corporation. 3. Area examined How much is the area of the freehold land in the name of the Corporation? Details of balance area not in the name of the Corporation alongwith the status. Observations/ The total area of freehold land in the name of the Corporation is 10,304.94 acres Findings (converted to acres in case of land held in different units by applying applicable standard conversion factor). 1,278.13 acres of balance freehold land is not in the name of Corporation, details of which are given below:
Particulars Area (In Acres) Remarks Freehold Land 1,120.73* Documents of title not available for verification Freehold Land 5.41 Documents of title lying with registration authorities, as informed Freehold Land 151.99 Mutation Pending, as informed * include 875.87 acres (` 2.20 cr) of freehold land under dispute as referred to in explanatory notes given in Note 2 of the Standalone Financial Statements.
For CVK & Associates For Borkar & Muzumdar Chartered Accountants Chartered Accountants ICAI FRN 101745W ICAI FRN 101569W
Sd/- Sd/- A K Pradhan Kaushal Muzumdar Partner Partner Membership No. 032156 Membership No. 100938 UDIN: 20032156AAAAAG3907 UDIN: 20100938AAAAAS9538 Place: Mumbai Date: 03rd June,2020
Annual Report 2019-20 181 ANNEXURE C TO INDEPENDENT AUDITORS’ REPORT
[Referred to in paragraph 21(f) under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditors’ Report of even date to the members of Bharat Petroleum Corporation Limited on the Standalone Ind AS Financial Statements for the year ended 31st March, 2020] Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Bharat Petroleum Corporation Limited (“the Corporation”) as of 31st March, 2020 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Corporation for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Corporation’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditors’ Responsibility Our responsibility is to express an opinion on the Corporation’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Corporation’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that: 1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; 2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and 3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
182 Bharat Petroleum Corporation Limited Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2020, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For CVK & Associates For Borkar & Muzumdar Chartered Accountants Chartered Accountants ICAI FRN 101745W ICAI FRN 101569W
Sd/- Sd/- A K Pradhan Kaushal Muzumdar Partner Partner Membership No. 032156 Membership No. 100938 UDIN: 20032156AAAAAG3907 UDIN: 20100938AAAAAS9538 Place: Mumbai Date: 03rd June,2020
Annual Report 2019-20 183 Balance Sheet as at 31st March 2020
` In Crores Note no. As at 31/03/2020 As at 31/03/2019 I. ASSETS (1) Non-current Assets (a) Property, Plant and Equipment 2 56,687.98 46,259.18 (b) Capital Work-In-Progress 3 9,108.09 6,702.63 (c) Investment Property 4 0.21 0.24 (d) Other Intangible assets 5 262.93 228.70 (e) Intangible Assets Under Development 6 396.62 363.10 (f) Investments in Subsidiaries, Joint Ventures and Associates 7 10,561.62 10,305.60 (g) Financial Assets (i) Investments 8 287.86 610.13 (ii) Loans 9 5,442.94 2,515.66 (iii) Other Financial Assets 10 8.30 21.96 (h) Income Tax Assets (Net) 11 1,381.25 449.40 (i) Other Non-current Assets 12 1,267.95 1,533.40 85,405.75 68,990.00 (2) Current Assets (a) Inventories 13 20,421.06 21,544.65 (b) Financial Assets (i) Investments 14 5,208.54 5,075.89 (ii) Trade Receivables 15 5,164.34 6,670.72 (iii) Cash and Cash Equivalents 16 98.27 78.49 (iv) Bank Balances other than Cash and Cash Equivalents 17 17.51 16.92 (v) Loans 18 590.58 1,628.88 (vi) Other Financial Assets 19 6,811.24 9,433.33 (c) Current Tax Assets (Net) 20 0.17 - (d) Other Current Assets 21 1,545.68 1,231.50 39,857.39 45,680.38 (3) Assets held-for-sale and Assets included in disposal group held-for-sale 22 (a) 1,205.84 956.87 TOTAL ASSETS 1,26,468.98 1,15,627.25
II. EQUITY AND LIABILITIES Equity (a) Equity Share Capital 23 1,966.88 1,966.88 (b) Other Equity 24 31,247.50 34,770.80 Total Equity 33,214.38 36,737.68 Liabilities (1) Non-current Liabilities (a) Financial Liabilities (i) Borrowings 25 26,272.70 23,628.57 (ii) Other Financial Liabilities 26 53.99 56.48 (b) Provisions 27 1,574.12 1,509.86 (c) Deferred Tax Liabilities (Net) 28 5,967.29 6,168.99 (d) Other Non-current Liabilities 29 381.72 284.01 34,249.82 31,647.91 (2) Current Liabilities (a) Financial Liabilities (i) Borrowings 30 17,721.37 3,580.75 (ii) Trade Payables a. Total outstanding dues of Micro Enterprises and Small Enterprises 67.17 52.04 b. Total outstanding dues of creditors other than Micro Enterprises and 31 12,442.37 17,635.50 Small Enterprises (iii) Other Financial Liabilities 32 22,472.48 19,126.12 (b) Other Current Liabilities 33 3,903.02 4,614.26 (c) Provisions 34 1,831.00 1,746.96 (d) Current Tax Liabilities (Net) 35 32.80 255.48 58,470.21 47,011.11 (3) Liabilities included in disposal group held-for-sale 22 (b) 534.57 230.55 Total Liabilities 93,254.60 78,889.57 TOTAL EQUITY AND LIABILITIES 1,26,468.98 1,15,627.25 Significant Accounting Policies 1 Notes forming part of Financial Statements 44-72 For and on behalf of the Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No.101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place: MUMBAI Date: 03rd June 2020
184 Bharat Petroleum Corporation Limited Statement of Profit and Loss for the Year ended 31st March 2020
` in Crores Particulars Note No. 2019-20 2018-19 Income I) Revenue from operations 36 3,27,580.78 3,37,622.53 II) Other income 37 3,081.31 2,983.60 III) Total Income (I + II) 3,30,662.09 3,40,606.13 IV) Expenses Cost of materials consumed 38 1,13,229.30 1,19,419.22 Purchases of stock-in-trade 39 1,43,164.25 1,46,974.06 Changes in inventories of finished goods, 40 (456.62) (1,703.06) stock-in-trade and work-in-progress Excise duty expense 43,197.83 40,347.48 Employee benefits expense 41 3,691.45 3,664.18 Finance costs 42 2,181.86 1,318.96 Depreciation and amortization expense 2,4,5 3,786.89 3,189.28 Other expenses 43 18,115.26 16,956.39 Total Expenses (IV) 3,26,910.22 3,30,166.51 V) Profit before Exceptional Item & Tax (III - IV) 3,751.87 10,439.62 VI) Exceptional Item (Refer Note No. 69) 1,080.83 - VII) Profit before Tax (V - VI) 2,671.04 10,439.62 VIII) Tax expense 28 1) Current tax 201.00 2,079.00 2) Deferred tax 400.68 1,316.48 3) Short / (Excess) provision of earlier years (613.83) (87.88) Total Tax expense (VIII) (12.15) 3,307.60 IX) Profit for the period (VII - VIII) 2,683.19 7,132.02 X) Other Comprehensive Income (i) Items that will not be reclassified to profit or loss (a) Remeasurements of defined benefit plans (284.47) (212.16) (b) Equity instruments through Other Comprehensive Income- (322.27) (71.08) net change in fair value (ii) Income tax relating to items that will not be reclassified to 108.75 81.64 profit or loss Other Comprehensive Income (X) (497.99) (201.60)
XI) Total Comprehensive Income for the period (IX + X) 2,185.20 6,930.42 XII) Basic and Diluted Earnings per Equity share (Face value ` 10) 54 13.64 36.26 Significant Accounting Policies 1 Notes forming part of Financial Statements 44 to 72 For and on behalf of the Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No.101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place: MUMBAI Date: 03rd June 2020
Annual Report 2019-20 185 STATEMENT OF CASH FLOWS
` in Crores For the Year ended 31/03/2020 31/03/2019 A. Net Cash Flow from Operating Activities Net Profit Before Tax (After Exceptional Items) 2,671.04 10,439.62 Adjustments for : Depreciation 3,786.89 3,189.28 Finance Costs 2,181.86 1,318.96 Foreign Exchange Fluctuations 1,021.17 (122.76) (Profit) / Loss on Sale of Property, Plant and Equipment 41.14 (5.29) (Profit) / Loss on Sale of Investments (26.31) (27.79) Income from Investments (1,099.08) (1,058.99) Dividend Received (1,091.81) (1,011.95) Expenditure towards Corporate Social Responsibility 198.98 203.32 Other Non-Cash items* (288.85) 249.17 Operating Profit before Working Capital Changes 7,395.03 13,173.57 (Invested in)/Generated from : Inventories 1,126.50 (751.22) Trade Receivables 1,357.78 (1,660.31) Other Receivables 2,097.16 (6,289.18) Current Liabilities & Payables (4,073.33) 5,243.04 Cash generated from Operations 7,903.14 9,715.90 Direct Taxes Paid (1,235.50) (1,893.10) Paid for Corporate Social Responsibility (309.89) (177.95) Net Cash from / (used in) Operating Activities 6,357.75 7,644.85
B. Net Cash Flow from Investing Activities Purchase of Property, Plant and Equipment / Intangible Assets (9,460.25) (9,056.83) Sale of Property, Plant and Equipment 27.03 40.00 Capital Advance 70.64 (56.33) Investment, Loans and Advances to Subsidiaries, Joint Venture Companies and Associates GSPL India Gasnet Limited (Equity) (52.80) (8.25) GSPL India Transco Limited (Equity) (12.21) - Kochi Salem Pipeline Private Limited (Equity) (56.25) (21.25) Mumbai Aviation Fuel Farm Facility Private Limited (Equity) - (6.40) IHB Pvt Ltd(Equity) (26.25) - Bharat PetroResources Limited (Equity) - (552.00) Haridwar Natural Gas Private Limited (Equity) (9.70) (5.00) Goa Natural Gas Private Limited (Equity) (8.00) (2.00) BPCL - KIAL Fuel Farm Facility Private Limited (Equity) - (1.11) Ratnagiri Refinery & Petrochemical Ltd(Equity) (25.00) - Bharat PetroResources Limited - Loan (Net) (1,850.00) 175.00 Bharat Gas Resources Limited (Equity) (140.00) (160.00) Advance against equity to Bharat Gas Resources Limited - (8.62) Sai Wardha Power Generation Limited (Equity) - 2.30 Capital Contribution in Petroleum India International 0.10 -
186 Bharat Petroleum Corporation Limited STATEMENT OF CASH FLOWS (Contd.)
` in Crores For the Year ended 31/03/2020 31/03/2019 Purchase of Government Securities (192.66) (94.00) Sale of Oil Bonds 322.89 95.10 Sale of T-Bills 400.00 - Purchase of T-Bills (398.54) - Purchase of Investments - Mutual Funds (38,376.00) (49,058.00) Sale of Investments - Mutual Funds 38,404.42 49,090.69 Interest Received 1,026.80 1,078.17 Dividend Received 1,091.81 1,011.95 Net Cash from / (used in) Investing Activities (9,263.97) (7,536.58)
C. Net Cash Flow from Financing Activities Payment of Lease Rentals (Principal Component) (102.47) - Payment of Lease Rentals (Interest Component) (507.82) - Short Term Borrowings (Net) 13,906.40 (4,726.04) Long Term Borrowings** 2,696.28 10,401.65 Repayment of Loans ** (5,987.71) (499.44) Interest Paid (1,326.62) (1,075.32) Dividend Paid (4,818.86) (3,540.39) Dividend Distribution Tax (918.98) (647.95) Net Cash from / (used in) Financing Activities 2,940.22 (87.49)
D. Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 34.00 20.78 Cash and Cash Equivalents as at 31/03/2019 31/03/2018 Cash on hand 33.26 17.69 Cheques and drafts on hand 24.70 16.19 Cash at Bank 20.53 42.12 Demand deposits with Banks with original maturity of less than three months - 77.34 Less : Bank Overdraft (211.12) (306.75) (132.63) (153.41)
Cash and Cash Equivalents as at 31/03/2020 31/03/2019 Cash on hand 6.08 33.26 Cheques and drafts on hand 6.10 24.70 Cash at Bank 86.09 20.53 Demand deposits with Banks with original maturity of less than three months - - Less : Bank Overdraft (196.90) (211.12) (98.63) (132.63) 34.00 20.78 * Includes FCMITDA Amortization loss of ` 80.96 Crores (Previous year loss ` 66.72 Crores) ** Includes refinancing of ECB of USD 330 Million
Annual Report 2019-20 187 STATEMENT OF CASH FLOWS (Contd.)
Disclosure to changes in liabilities arising from Financing Activities
` in Crores Particulars Short term Long term Borrowings Total liabilities from Borrowings(excluding Bank (including current Financing Activities Overdraft) maturities) As on 31st March , 2018 7,786.26 15,257.66 23,043.92 Cash flows (4,726.04) 9,902.22 5,176.18 Non cash changes a) Foreign exchange movement 309.41 255.68 565.09 b) Recognition of deferred income and - 70.73 70.73 its amortization c) Fair value changes - 32.26 32.26 As on 31st March , 2019 3,369.63 25,518.55 28,888.18
` in Crores Particulars Short term Long term Borrowings Total liabilities from Borrowings(excluding Bank (including current Financing Activities Overdraft) maturities) As on 31st March , 2019 3,369.63 25,518.55 28,888.18 Cash flows 13,906.40 (3,291.43) 10,614.97 Non cash changes a) Foreign exchange movement 248.44 1,891.71 2,140.15 b) Recognition of deferred income and its - 2.49 2.49 amortization c) Increase in Lease Obligations due to - 5,940.06 5,940.06 Ind AS 116 d) Fair value changes - 35.94 35.94 As on 31st March , 2020 17,524.47 30,097.32 47,621.79
Explanatory notes to Statement of Cash Flows 1. The Statement of Cash Flows is prepared in accordance with the format prescribed by Securities and Exchange Board of India and as per Ind AS 7 as notified by Ministry of Corporate Affairs. 2. In Part-A of the Statement of Cash Flows, figures in brackets indicate deductions made from the Net Profit for deriving the net cash flow from operating activities. In Part-B and Part-C, figures in brackets indicate cash outflows. 3. The net profit / loss arising due to conversion of current assets / current liabilities, receivable / payable in foreign currency is furnished under the head "Foreign Exchange Fluctuations". 4. “Other Non-Cash items” include excess provisions written back, diminution in value of investment, Reversal of excess capitalization, amortization of Capital grant, Bad debts and materials written off and miscellaneous adjustments not affecting Cash Flow. 5. "Current Liabilities and Payables" may include Payables in respect of Purchase of Propery Plant and Equipments, if any.
For and on behalf of the Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No.101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place: MUMBAI Date: 03rd June 2020
188 Bharat Petroleum Corporation Limited - - - - 66.72 364.27 (39.79) Amount (202.37) (162.82) (647.95) (201.60) Total 1,966.88 2,169.25 2,169.25 7,132.02 ` in Crores 32,124.82 34,770.80 32,164.61 (3,904.66) ` in Crores
------(456.74) - (456.74) (456.74) BPCL As at Trust for in Shares Investment 31/03/2019 [Note No. 24] ------78.99 15.41 78.99 No. of Shares (63.58) (202,372,422) 1,966,880,322 2,169,252,744 2,169,252,744 Equity Income Instruments [Note No. 24] through Other Comprehensive ------
66.72 66.76 66.76 Amount (29.34) (202.37) 1,966.88 2,169.25 2,169.25 (162.82) Foreign Account Currency Difference (FCMITDA) Translation [Note No. 24] Monetary Item - - - - As at 364.27 (39.79) 24]* (647.95) (295.91) (138.02) 4,987.56 7,132.02 5,027.35 4,997.31 31/03/2020 (2,500.00) (3,904.66) Earnings Retained [Note No. M arch 2020 ------st No. of Shares (202,372,422) 1,966,880,322 2,169,252,744 2,169,252,744 243.92 2,500.00 26,360.45 General 26,360.45 29,104.37 Reserve [Note No. 24] ------Reserves & Surplus 295.91 (243.92) 1,108.56 1,108.56 1,160.55 Reserve Debenture Redemption [Note No. 24] ------(20.76) (20.76) (20.76) Capital Reserve [Note No. 24]
March 2019 st Other Equity Equity Share Capital Balance at 31 Amortization during the year - FCMITDA Transfer to Debenture Redemption reserve Transfer to General Reserve Transfer to General Reserve on redemption of debentures/ bonds Additions/(deletions) during the year - FCMITDA Balance at the end of reporting period after Adjustment Dividend to BPCL Trust for Investment in Shares (Refer Note No. 45) Dividend Distribution Tax Less: Adjustment for Shares held by BPCL Trust Investment in (Refer Note No. 45) Balance at the end of reporting period Dividends Add: Issue of Bonus Shares (Refer Note No. 23) Balance at the beginning of reporting period Profit for the year Other Comprehensive Income for the year Opening balance after the above effect (b) Transfer to deferred income on account of implementation of Ind AS 115 (net tax) Balance at 01st April 2018 (a) S tatement of C hanges in Eq uity for the year ended 31
Annual Report 2019-20 189 - - 4.45 80.96 495.81 (51.62) (923.43) (497.99) Total 2,683.19 31,247.50 34,770.80 (5,314.67) ` in Crores ------(257.56) Crores] (456.74) (456.74) BPCL
Trust for in Shares Investment [Note No. 24] ------15.41 (312.93) (297.52) Equity Income Membership No. 100938 Partner Kaushal Muzumdar Sd/- ICAI FR No. 101569W Chartered Accountants Borkar & Muzumdar Instruments [Note No. 24] through Other Comprehensive ------(442.62) Crores [Previous year ` For and on behalf of 80.96 (51.62) (29.34) Foreign Account Currency Difference (FCMITDA) Translation As per our attached report of even date [Note N0. 24] Monetary Item March 2020 ` st - - - 4.45 495.81 24]* (923.43) (293.21) (185.06) 1,464.39 2,683.19 4,997.31 (5,314.67) Earnings Retained [Note No. M arch 2020 (C ontd .) ------st 377.40 Membership No. 032156 Partner A.K. Pradhan Sd/- ICAI FR No.101745W Chartered Accountants CVK & Associates 29,481.77 General 29,104.37 Reserve [Note No. 24] ------Reserves & Surplus 293.21 (377.40) 1,076.36 1,160.55 Reserve Debenture Redemption [Note No. 24] ------(20.76) (20.76) Capital Reserve [Note No. 24]
Company Secretary V. Kala Sd/- June 2020 rd Other Equity *The balance includes accumulated Gain/(loss) on account of Remeasurements defined benefit plans (Net tax) as 31 Balance at 31st March 2020 Amortization during the year - FCMITDA Additions/(deletions) during the year - FCMITDA Transfer to General Reserve on redemption of debentures/ on redemption of Reserve to General Transfer bonds Add/Less: Dividend Distribution tax pertaining to previous years Transfer to Debenture Redemption reserve Dividend Distribution Tax Dividend to BPCL Trust for Investment in Shares for Trust BPCL Dividend to (Refer Note No. 45) Dividends Other Comprehensive Income for the year (b) Profit for the year Balance as at 01st April 2019 Place : MUMBAI Date : 03 DIN: 03621835 Director (Finance) N. Vijayagopal Sd/- DIN: 00872597 Chairman and Managing Director Sd/- D. Rajkumar For and on behalf of the Board Directors S tatement of C hanges in Eq uity for the year ended 31
190 Bharat Petroleum Corporation Limited NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2020
Corporation Overview Bharat Petroleum Corporation Limited referred to as “BPCL” or “the Corporation” was incorporated on 03rd November, 1952. BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants at various locations. The Corporation’s marketing infrastructure includes vast network of Installations, Depots, Retail Outlets, Aviation Fuelling Stations and LPG distributors. 1. Statement of Significant Accounting Policies Basis for preparation: The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (“Act”) read with Companies (Indian Accounting Standards) Rules, 2015; and the other relevant provisions of the Act and Rules thereunder. The Financial Statements have been prepared under historical cost convention basis, except for certain assets and liabilities measured at fair value. The Corporation has adopted all the Ind AS and the adoption was carried out during Financial Year 2016-17 in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards. The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the “Previous GAAP”. The Corporation’s presentation and functional currency is Indian Rupees (`). All figures appearing in the financial statements are rounded to the nearest Crores (` Crores) except where otherwise indicated. Authorization of Financial Statements: The Financial Statements were authorized for issue in accordance with a resolution of the Board of Directors in its meeting held on 03rd June 2020. 1.1. Use of Judgement and Estimates The preparation of the Corporation’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets, liabilities and the accompanying disclosures along with contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of assets or liabilities affected in future periods. The Corporation continually evaluates these estimates and assumptions based on the most recently available information. In particular, information about significant areas of estimates and judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as below: • Assessment of functional currency; • Financial instruments; • Estimates of useful lives and residual value of Property, Plant and Equipment and Intangible assets; • Valuation of Inventories; • Measurement of recoverable amounts of Cash-Generating Units; • Measurement of Defined Benefit Obligations and actuarial assumptions; • Provisions including loss allowances; • Evaluation of recoverability of Deferred Tax Assets; and • Contingencies. Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected. 1.2. Property, Plant and Equipment 1.2.1. Property, Plant and Equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. 1.2.2. The initial cost of an asset comprises its purchase price or construction cost (including import duties and non-refundable taxes), any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial
Annual Report 2019-20 191 estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use). 1.2.3. Direct expenses incurred during construction period on capital projects are capitalized. Other expenses of the project group which are allocated to projects costing above a threshold limit are also capitalized. Expenditure incurred on enabling assets are capitalized. 1.2.4. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Corporation. 1.2.5. Expenditure on assets, other than plant and machinery, LPG cylinders and pressure regulators, not exceeding threshold limit are charged to revenue. 1.2.6. Spare parts which meet the definition of Property, Plant and Equipment are capitalized as Property, Plant and Equipment in case the unit value of the spare part is above the threshold limit. In other cases, the spare part is inventorised on procurement and charged to Statement of Profit and Loss on consumption. 1.2.7. An item of Property, Plant and Equipment and any significant part initially recognized separately as part of Property, Plant and Equipment is derecognised upon disposal; or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in the Statement of Profit and Loss when the asset is derecognised. 1.2.8. The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end and changes, if any, are accounted in line with revisions to accounting estimates. 1.2.9. In respect of the capital goods common for both GST and non-GST products, the GST input tax credit is taken on the eligible portion based on GST and non-GST product ratio in the month of procurement and the ineligible portion is capitalized. Subsequently, this ratio is reviewed every month as per the GST provisions and the differential GST amount arising due to changes in the ratio is capitalized when beyond the materiality threshold. 1.2.10. The Corporation has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015). 1.3. Depreciation Depreciation on Property, Plant and Equipment are provided on the straight line basis, over the estimated useful lives of assets (after retaining the estimated residual value of upto 5%). These useful lives and residual value has been determined as prescribed in the Schedule II of the Act, except in following cases: 1.3.1. Plant & Machinery at Retail Outlets (other than Storage tanks and related equipments) are depreciated over a useful life of 15 years based on the technical assessment. 1.3.2. Computer equipments are depreciated over a period of 3 years and Mobile phones are depreciated over a period of 2 years based on internal assessment. Electronic and electrical equipments provided to management staff under furniture on hire scheme are depreciated over a period of 4 years as per internal assessment. Other furniture items provided to management staff are depreciated over a period of 6 years as per internal assessment. 1.3.3. Solar Panels are depreciated over a period of 25 years based on the technical assessment of useful life and applicable warranty conditions. 1.3.4. Moulds, used for the manufacturing of the packaging material for Lubricants, are depreciated over a period of 5 years based on technical assessment of useful life. 1.3.5. Items of Property, Plant and Equipment costing not more than the threshold limit are depreciated at 100 percent in the year of acquisition except LPG Cylinders and Pressure Regulators which are depreciated over a useful life of 15 years based on the technical assessment. 1.3.6. Components of the main asset that are significant in value and have different useful lives as compared to the main asset are depreciated over their estimated useful life. Useful life of such components has been assessed based on historical experience and internal technical assessment.
192 Bharat Petroleum Corporation Limited 1.3.7. Depreciation on spare parts specific to an item of Property, Plant and Equipment is based on life of the related Property, Plant and Equipment. In other cases, the spare parts are depreciated over their estimated useful life based on the technical assessment. 1.3.8. Depreciation is charged on additions / deletions on pro-rata monthly basis including the month of addition / deletion. 1.3.9. The Residual value of LPG cylinders and Pressure Regulators have been estimated at 15% of the original cost (Previous Year upto 5% of the original cost) based on the historical experience and internal technical assessment. 1.4. Intangible Assets 1.4.1. Intangible assets are carried at cost net of accumulated amortization and accumulated impairment losses, if any. Expenditure on internally generated intangibles, excluding development costs, is not capitalized and is reflected in Statement of Profit and Loss in the period in which such expenditure is incurred. Development costs are capitalized if, and only if, technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Corporation has an intention and ability to complete and use or sell the asset and the costs can be measured reliably. 1.4.2. Assets where entire output generated is committed to be sold to entities providing public services for almost entire useful life of the asset are classified as intangible assets as per the requirements of applicable Ind AS and are amortized (after retaining the residual value, if applicable) over their useful life or the period of the agreement, whichever is lower. 1.4.3. In cases where, the Corporation has constructed assets on behalf of public infrastructure entities and the Corporation has only a preferential right to use, these assets are classified as intangible assets and are amortized (after retaining the residual value, if applicable) over their useful life or the period of the agreement, whichever is lower. 1.4.4. Intangible assets with indefinite useful lives, such as right of way which is perpetual and absolute in nature, are not amortized, but are tested for impairment annually. The useful lives are reviewed at each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If not, the change in useful life from indefinite to finite is made on a prospective basis. The impairment losses on intangible assets with indefinite life is recognized in the Statement of Profit and Loss. 1.4.5. Expenditure incurred for creating / acquiring other intangible assets above threshold limit from which future economic benefits will flow over a period of time, is amortized over the estimated useful life of the asset or five years, whichever is lower, on a straight line basis, from the time the intangible asset starts providing the economic benefit. In other cases, the expenditure is reflected in the Statement of Profit and Loss in the year in which the expenditure is incurred. The amortization period and the amortization method for an intangible asset with a finite life are reviewed at each year end. The amortization expense on intangible asset with finite useful lives and impairment losses in case there is an indication that the intangible asset may be impaired, is recognized in the Statement of Profit and Loss. 1.4.6. The Corporation has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its intangible assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015). 1.5. Investment Property 1.5.1. Investment property is property (land or a building or part of a building or both) held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in production or supply of goods or services or for administrative purposes. Investment properties are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. 1.5.2. Any gain or loss on disposal of investment property calculated as the difference between the net proceeds from disposal and the carrying amount of the Investment Property is recognized in Statement of Profit and Loss. 1.5.3. On transition to Ind AS i.e. 1st April 2015, the Corporation has re-classified certain items from Property, Plant and Equipment to investment property. For the same, Corporation has elected to use the exemption
Annual Report 2019-20 193 available under Ind AS 101 to continue the carrying value for such assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015). 1.6. Borrowing costs 1.6.1. Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs. 1.6.2. Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged to the Statement of Profit and Loss. 1.6.3. Investment Income earned on the temporary investment of funds of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. 1.7. Non-current assets/Disposal Group held for sale 1.7.1. Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets. 1.7.2. Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell (upto 5% of the acquisition value). 1.7.3. The disposal group classified as held for sale, are measured at the lower of carrying amount and fair value less costs to sell. 1.7.4. Property, Plant and Equipment and Intangible assets classified as held for sale are not depreciated or amortized. 1.8. Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset to lessee for a period of time in exchange for consideration. Corporation shall reassess whether a contract is, or contains, a lease if the terms and conditions of the contract are changed. 1.8.1. As a Lessee At the commencement date, corporation recognizes a right-of-use asset at cost and a lease liability at present value of the lease payments that are not paid at commencement date. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has right to obtain substantially all of the economic benefits from use of the asset throughout the period of the lease and (iii) the Company has the right to direct the use of the asset. The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability (at present value) adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives (at present value) except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense. Lease of items such as IT Assets (tablets, personal computers, mobiles, POS machines etc.), small items of office furniture etc. are treated as low value. The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the Corporation’s incremental borrowing rate computed on periodic basis based on lease term. Lease liabilities are re-measured with a corresponding adjustment to the related right-of-use asset if the Company changes its assessment, whether it will exercise an extension or a termination option. Right-of-use assets are depreciated over the lease term on systematic basis and Interest on lease liability is charged to Statement of Profit and Loss as Finance cost.
194 Bharat Petroleum Corporation Limited 1.8.2. As a Lessor A lessor shall classify each of its leases as either an operating lease or a finance lease. 1.8.2.1. Finance leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Corporation shall recognize assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease. 1.8.2.2. Operating leases A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. Corporation shall recognize lease payments from operating leases as income on systematic basis in the pattern in which benefit from the use of the underlying asset is diminished. 1.9. Impairment of Non-financial Assets 1.9.1. Non-financial assets other than inventories, deferred tax assets and non-current assets classified as held for sale are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, or when annual impairment testing for an asset is required, the Corporation estimates the asset’s recoverable amount. The recoverable amount is the higher of the asset’s or Cash-Generating Unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. 1.9.2. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 1.10. Inventories 1.10.1. Inventories are stated at cost or net realizable value, whichever is lower. Cost of inventories comprises of expenditure incurred in the normal course of business in bringing inventories to their present location including appropriate overheads apportioned on a reasonable and consistent basis and are determined on the following basis: - Crude oil, traded goods and finished products other than lubricants are determined on First in First out basis. - Other raw materials, packages, lubricants and stores and spares are determined on weighted average basis. - The cost of Stock-in-Process is determined at raw material cost plus cost of conversion. 1.10.2. Customs duty on Raw materials/Finished goods lying in bonded warehouse are provided for at the applicable rates except where liability to pay duty is transferred to consignee. 1.10.3. Excise duty on finished stocks lying at manufacturing locations is provided for at the assessable value applicable at each of the locations based on end use. 1.10.4. The net realizable value of finished goods and stock-in-trade are based on the inter-company transfer prices and final selling prices (applicable at the location of stock) for sale to oil marketing companies and retail consumers respectively. For the purpose of stock valuation, the proportion of sales to oil marketing companies and retail consumers are determined on all India basis and considered for stock valuation at all locations. 1.10.5. Raw Materials held for use in the production of finished goods are not written down below cost except in cases where raw material prices have declined and it is estimated that the cost of the finished goods will exceed their net realizable value. 1.10.6. Obsolete, slow moving, surplus and defective stocks are identified at the time of physical verification of stocks and where necessary, provision is made for such stocks.
Annual Report 2019-20 195 1.11. Revenue Recognition 1.11.1. Sale of goods Revenue from the sale of goods is recognized when the performance obligation is satisfied by transferring the related goods to the customer. The performance obligation is considered to be satisfied when the customer obtains control of the goods. Revenue from the sale of goods includes excise duty and is measured at the fair value of the consideration received or receivable (after including fair value allocations related to arrangements involving more than one performance obligation), net of returns, taxes or duties collected on behalf of the Government and applicable trade discounts or rebates. Revenue is allocated between loyalty programmes and other components of the sale. The amount allocated to the loyalty programme is deferred, and is recognized as revenue when the Corporation has fulfilled its obligation to supply the products under the terms of the programme. Any upfront fees earned by the Corporation with no identifiable performance obligation are recognized as revenue on a systematic basis over the period of the Contract. Where the Corporation acts as an agent on behalf of a third party, the associated income is recognized on a net basis. Claims in respect of subsidy on LPG and SKO, from Government of India are booked on in-principle acceptance thereof on the basis of available instructions / clarifications, subject to final adjustments as stipulated. 1.11.2. Construction contracts Revenue from Construction contracts arise from the service concession arrangements entered into by the Corporation and certain arrangements involving construction of specific assets as part of arrangements involving more than one performance obligation. Contract revenue includes the amount agreed in the contract to the extent that it is probable that they will result in revenue and can be measured reliably. Based on an assessment of the terms of such contracts, the contract revenue is recognized in the Statement of Profit and Loss based on the percentage of completion method. The stage of completion is assessed with reference to the proportion of actual cost incurred as compared to the total estimated cost of the related contract. Contract expenses are recognized as incurred unless they create an asset relating to future contract activity. An expected loss on a contract is recognized immediately in the Statement of Profit and Loss. 1.11.3. Interest income is recognized using Effective Interest Rate (EIR) method. 1.11.4. Dividend is recognized when right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of dividend can be measured reliably. 1.11.5. Income from sale of scrap is accounted for on realization. 1.11.6. Claims other than subsidy claims on LPG and SKO, from Government of India are booked when there is a reasonable certainty of recovery. 1.12. Classification of Income / Expenses 1.12.1. Income / expenditure (net) in aggregate pertaining to prior year(s) above the threshold limit are corrected retrospectively in the first set of financial statements approved for issue after their discovery by restating the comparative amounts and / or restating the opening Balance Sheet for the earliest prior period presented. 1.12.2. Prepaid expenses upto threshold limit in each case, are charged to revenue as and when incurred. 1.12.3. Deposits placed with Government agencies / local authorities which are perpetual in nature are charged to revenue in the year of payment.
196 Bharat Petroleum Corporation Limited 1.13. Employee Benefits 1.13.1. Short-term employee benefits Short-term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit and Loss of the year in which the related services are rendered. 1.13.2. Post-employment benefits Defined Contribution Plans: Obligations for contributions to defined contribution plans such as pension are recognized as an expense in the Statement of Profit and Loss as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a set-off in future payments is available. Defined Benefit Plans: The Corporation’s net obligation in respect of defined benefit plans such as gratuity, other post- employment benefits etc., is calculated separately for each plan by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligation is performed at each reporting period end by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Corporation, the recognized asset is limited to the present value of the economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. The current service cost of the defined benefit plan, recognized in the Statement of Profit and Loss as part of employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit and Loss. The net interest is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This net interest is included in employee benefit expense in the Statement of Profit and Loss. Re-measurements which comprise of actuarial gains and losses, the return on plan assets (excluding amounts included in the net interest on the net defined benefit liability (asset)) and the effect of the asset ceiling (if any, excluding amounts included in the net interest on the net defined benefit liability (asset)), are recognized in other comprehensive income. 1.13.3. Other long-term employee benefits Liability towards other long-term employee benefits - leave encashment and long service awards etc., are determined on actuarial valuation by qualified actuary by using Projected Unit Credit method. The current service cost of other long terms employee benefits, recognized in the Statement of Profit and Loss as part of employee benefit expense, reflects the increase in the obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit and Loss. The interest cost is calculated by applying the discount rate to the balance of the obligation. This cost is included in employee benefit expense in the Statement of Profit and Loss. Re-measurements are recognized in the Statement of Profit and Loss. 1.13.4. Termination benefits Expenditure on account of Voluntary Retirement Scheme are charged to Statement of Profit and Loss as and when incurred. 1.14. Foreign Currency Transactions 1.14.1. Monetary items: Transactions in foreign currencies are initially recorded at their respective exchange rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates prevailing on the reporting date.
Annual Report 2019-20 197 Exchange differences arising on settlement or translation of monetary items (except for long-term foreign currency monetary items outstanding as of 31st March 2016) are recognized in Statement of Profit and Loss either as profit or loss on foreign currency transaction and translation or as borrowing costs to the extent regarded as an adjustment to borrowing costs. The Corporation has elected to continue the policy adopted under Previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of 31st March 2016 i.e. foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any, accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of the liability. 1.14.2. Non – Monetary items: Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. 1.15. Investment in Subsidiaries, Joint Ventures and Associates Investments in equity shares of Subsidiaries, Joint Ventures and Associates are recorded at cost and reviewed for impairment at each reporting date. 1.16. Government Grants 1.16.1. Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. 1.16.2. When the grant relates to an expense item, it is recognized in Statement of Profit and Loss on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. 1.16.3. Government grants relating to Property, Plant and Equipment are presented as deferred income and are credited to the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. 1.17. Provisions, Contingent Liabilities and Capital Commitments 1.17.1. Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 1.17.2. The expenses relating to a provision is presented in the Statement of Profit and Loss net of reimbursements, if any. 1.17.3. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. 1.17.4. Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Corporation, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability. 1.17.5. Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. 1.17.6. Contingent liabilities and Capital Commitments disclosed are in respect of items which in each case are above the threshold limit. 1.18. Fair Value measurement 1.18.1. The Corporation measures certain financial instruments at fair value at each reporting date. 1.18.2. Certain accounting policies and disclosures require the measurement of fair values, for both financial and non- financial assets and liabilities.
198 Bharat Petroleum Corporation Limited 1.18.3. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Corporation has access at that date. The fair value of a liability also reflects its non-performance risk. 1.18.4. The best estimate of the fair value of a financial instrument on initial recognition is normally the transaction price i.e. the fair value of the consideration given or received. If the Corporation determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently that difference is recognized in Statement of Profit and Loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out. 1.18.5. While measuring the fair value of an asset or liability, the Corporation uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation technique as follows: - Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. - Level 2: inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) - Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs) 1.18.6. When quoted price in active market for an instrument is available, the Corporation measures the fair value of the instrument using that price. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. 1.18.7. If there is no quoted prices in an active market, then the Corporation uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. 1.18.8. The Corporation regularly reviews significant unobservable inputs and valuation adjustments. If the third party information, such as broker quotes or pricing services, is used to measure fair values, then the Corporation assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. 1.19. Financial Assets 1.19.1. Initial recognition and measurement Trade Receivables and debt securities issued are initially recognized when they are originated. All other financial assets are initially recognized when the Corporation becomes a party to the contractual provisions of the instrument. All financial assets other than those measured subsequently at fair value through profit and loss, are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. 1.19.2. Subsequent measurement Subsequent measurement is determined with reference to the classification of the respective financial assets. Based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial asset, the Corporation classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit and loss. Debt instruments at amortized cost A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met:
Annual Report 2019-20 199 The asset is held within a business model whose objective is - To hold assets for collecting contractual cash flows, and - Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognized in the Statement of Profit and Loss. Debt instruments at Fair value through Other Comprehensive Income (FVOCI) A ‘debt instrument’ is measured at the fair value through Other Comprehensive Income if both the following conditions are met: The asset is held within a business model whose objective is achieved by both - collecting contractual cash flows and selling financial assets and - contractual terms of the asset give rise on specified dates to cash flows that are SPPI on the principal amount outstanding. After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment losses are recognized in the Statement of Profit and Loss. Other net gains and losses are recognized in other comprehensive Income. Debt instruments at Fair value through Profit or Loss (FVTPL) Fair Value through Profit or Loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation at amortized cost or as FVOCI, is classified as FVTPL. After initial measurement, any fair value changes including any interest income, foreign exchange gain and losses, impairment losses and other net gains and losses are recognized in the Statement of Profit and Loss separately. Equity investments All equity investments within the scope of Ind AS 109 are measured at fair value. Such equity instruments which are held for trading are classified as FVTPL. For all other such equity instruments, the Corporation decides to classify the same either as FVOCI or FVTPL. The Corporation makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. For equity instruments classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in Other Comprehensive Income (OCI). Dividends on such equity instruments are recognized in the Statement of Profit and Loss. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss. 1.19.3. De-recognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Corporation’s Balance Sheet) when: The rights to receive cash flows from the asset have expired, or The Corporation has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass- through’ arrangement; and either: - The Corporation has transferred substantially all the risks and rewards of the asset, or - The Corporation has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
200 Bharat Petroleum Corporation Limited On de-recognition, any gains or losses on all debt instruments (other than debt instruments measured at FVOCI) and equity instruments (measured at FVTPL) are recognized in the Statement of Profit and Loss. Gains and losses in respect of debt instruments measured at FVOCI and that are accumulated in OCI are reclassified to profit or loss on de-recognition. Gains or losses on equity instruments measured at FVOCI that are recognized and accumulated in OCI are not reclassified to profit or loss on de-recognition. 1.19.4. Impairment of financial assets In accordance with Ind-AS 109, the Corporation applies Expected Credit Loss (“ECL”) model for measurement and recognition of impairment loss on the financial assets measured at amortized cost and debt instruments measured at FVOCI. Loss allowances on receivables from customers are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date. In respect of other financial assets such as loan to LPG Consumers, debt securities and bank balances, the loss allowance is measured at 12 month ECL only if there is no significant deterioration in the credit risk since initial recognition of the asset or asset is determined to have a low credit risk at the reporting date. 1.20. Financial Liabilities 1.20.1. Initial recognition and measurement Financial liabilities are initially recognized when the Corporation becomes a party to the contractual provisions of the instrument. Financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss, transaction costs that are directly attributable to its acquisition or issue. 1.20.2. Subsequent measurement Subsequent measurement is determined with reference to the classification of the respective financial liabilities. Financial Liabilities at Fair Value through Profit or Loss (FVTPL) A financial liability is classified as at Fair Value through Profit or Loss (FVTPL) if it is classified as held- for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognized in Statement of Profit and Loss. Financial Liabilities at amortized cost After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortized cost using the effective interest rate (“EIR”) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The amortization done using the EIR method is included as finance costs in the Statement of Profit and Loss. 1.20.3. De-recognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss. 1.21. Financial guarantees Financial guarantee contracts issued by the Corporation are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of the debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the fair value initially recognized less cumulative amortization.
Annual Report 2019-20 201 1.22. Derivative financial instruments The Corporation uses derivative financial instruments to manage the commodity price risk and exposure on account of fluctuation in interest rate and foreign exchange rates. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value with the changes being recognized in the Statement of Profit and Loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The fair valuation gains or losses on foreign currency derivatives measured at FVTPL are grouped along with Gain or loss on foreign currency transactions and translations and presented under “Other Income” or “Other expenses”, as the case may be, since these derivatives constitute hedges from an economic perspective and may not qualify for hedge accounting under Ind AS 109. 1.23. Embedded derivatives If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109, the classification requirements contained in Ind AS 109 are applied to the entire hybrid contract. Derivatives embedded in all other host contracts, including financial liabilities are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit and loss. These embedded derivatives are measured at fair value with changes in fair value recognized in Statement of Profit and Loss, unless designated as effective hedging instruments. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows. 1.24. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet, if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. 1.25. Taxes on Income 1.25.1. Current Tax Income tax Assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the end of reporting period. Current Tax items are recognized in correlation to the underlying transaction either in the Statement of Profit and Loss, other comprehensive income or directly in equity. 1.25.2. Deferred tax Deferred tax is provided using the Balance Sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Deferred Tax items are recognized in correlation to the underlying transaction either in the Statement of Profit and Loss, other comprehensive income or directly in equity.
202 Bharat Petroleum Corporation Limited Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. 1.26. Earnings per share 1.26.1. Basic earnings per share are calculated by dividing the profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period. 1.26.2. For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares. 1.27. Classification of Assets and Liabilities as Current and Non-Current All assets and liabilities are classified as current or non-current as per the Corporation’s normal operating cycle (considered as 12 months) and other criteria set out in Schedule III of the Act. 1.28. Cash and Cash equivalents Cash and cash equivalents in the Balance Sheet include cash at bank, cash, cheque, draft on hand and demand deposits with an original maturity of less than three months, which are subject to an insignificant risk of changes in value. For the purpose of Statement of Cash Flows, Cash and cash equivalents include cash at bank, cash, cheques and drafts on hand, net of outstanding bank overdrafts as they are considered an integral part of the Corporation’s cash management. The Corporation considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. 1.29. Cash Flows Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated. 1.30. The Corporation has adopted materiality threshold limits in the preparation and presentation of financials statements as given below: Accounting Threshold Threshold Item Policy Unit Limit Value Reference Allocation of other expenses to projects costing in each 1.2.3 ` Crores 5 case Expenditure on certain items of Property, Plant and 1.2.5 ` 1,000 Equipment charged to revenue in each case Capitalization of spare parts meeting the definition of 1.2.6 ` Lakhs 10 Property, Plant and Equipment in each case GST on common capital goods per item per month 1.2.9 ` Lakhs 5 Depreciation at 100 percent in the year of acquisition 1.3.5 ` 5,000 except LPG Cylinders and Pressure Regulators Expenditure incurred for creating / acquiring other 1.4.5 ` Lakhs 50 intangible assets in each case Income / expenditure (net) in aggregate pertaining to prior 1.12.1 ` Crores 150 year(s) Prepaid expenses in each case 1.12.2 ` Lakhs 5 Disclosure of Contingent liabilities and Capital 1.17.6 ` Lakhs 5 Commitments in each case
Annual Report 2019-20 203 -
0.74 44.92 521.58 126.65 463.74 As at 2,126.13 8,720.52 6,146.34 6,504.33 1,900.78 19,703.45 46,259.18 ( ` in Crores) 31/03/2019 -
49.02 502.83 144.98 592.99 As at 2,244.40 9,121.97 6,941.94 7,160.59 2,109.76 6,849.95 Net Carrying Amount 20,969.55 46,259.18 56,687.98 31/03/2020 - -
68.68 29.06 821.57 601.41 320.09 377.71 Up to 1,477.33 5,736.15 9,206.06 1,747.86 1,523.46 12,703.32 31/03/2020
- - - -
6.86 1.92 9.51 0.25 12.61 16.80 11.43 52.59 215.20 274.58 Disposal Retirement / / Deductions On Account Of Reclassifications - -
8.83 14.42 84.09 184.23 405.58 161.18 400.26 458.77 377.96 Year For the 1,676.55 3,165.52 3,771.87 Depreciation ------(0.03) (0.03) Transition Ind AS 116 - -
0.03 54.26 22.15 649.95 457.03 247.43 Up to 1,078.61 4,274.80 1,357.11 6,093.13 1,064.69 9,206.06 31/03/2019 -
78.08 213.66 913.08 As at 3,065.97 1,104.24 8,689.80 2,109.76 8,684.05 7,227.66 10,599.30 26,705.70 55,465.24 69,391.30 31/03/2020
- - -
2.95 3.44 19.62 55.91 19.73 13.95 28.84 37.67 327.71 181.73 509.82 Disposal Retirement / / Deductions On Account Of Reclassifications ------0.26 0.01 5.59 10.26 635.31 418.83 651.43 Other Adjustments (Refer Note 55) Gross Block - 32.75 13.96 309.51 845.82 145.10 215.85 246.65 913.95 2,419.85 1,209.60 6,324.41 1,115.03 7,468.07 Additions ------(0.77) 6,317.15 6,316.38 Transition Ind AS 116 -
0.77 67.07 180.91 978.61 711.17 As at 2,776.08 9,799.13 7,503.45 1,900.78 7,569.02 23,978.25 48,903.73 55,465.24 01/04/2019
LPG Cylinders and Allied Dispensing Pumps Railway Sidings * Tanks and Pipelines * Vehicles * Office Equipments * Furniture and Fixtures * * These include assets which are given on Operating Leases or Finance Leases, the details thereof included in Note no. 49 Plant and Equipments * Buildings including Roads * Right-of-use Assets Previous Year (b) Leasehold * Land (a) Freehold * Particulars Total Equipments (Refer Note No. 49) N ote 2 P roperty , lant and Eq uipment
204 Bharat Petroleum Corporation Limited Note 3 CAPITAL WORK-IN-PROGRESS
` in Crores As at As at Particulars 31/03/2020 31/03/2019 Capital work-in-progress Property, Plant & equipment under erection/ construction 7,951.72 5,377.59 Capital stores including those lying with contractors 908.36 938.62 Capital goods in transit 2.27 249.44
Allocation of Construction period expenses 2019-20 2018-19 Opening balance 323.60 209.29 Add: Expenditure during the year Establishment charges including 138.97 120.60 Salaries & Wages Interest 183.42 70.31 Loss on foreign currency transactions 0.07 0.19 and translations Insurance 2.28 1.25 Others 7.64 11.44 655.98 413.08
Less: Allocated to assets capitalized during (125.09) (89.48) the year/ charged off Closing balance pending allocation 530.89 323.60 Less: Assets included in disposal group held (285.15) (186.62) for sale (refer Note no. 22(a) and 68) Total 9,108.09 6,702.63
Annual Report 2019-20 205 0.24 0.24 As at ` in Crores 31/03/2019 0.21 0.21 0.24 As at Net Carrying Amount 31/03/2020 0.12 0.12 0.09 Up to 31/03/2020 - - - 1.08 1.06 (0.02) Disposal Retirement / / Deductions On Account Of 2018-19 Reclassifications ` in Crores Depreciation 1.27 1.24 0.03 0.02 0.03 (0.03) year For the 2019-20 0.09 0.07 0.09 4.97 Crores respectively. These fair values of the investment of values fair These respectively. 4.32 Crores and ` 4.97 Up to ` 31/03/2019 0.33 0.33 0.33 As at 31/03/2020 - - - Disposal Retirement / / Deductions On Account Of Reclassifications - - - Gross Block Additions March 2019, the fair values of the property are the property of values March 2019, the fair st 0.33 0.33 0.33 As at 01/04/2019 March 2020 and 31 March st Buildings TOTAL Previous year The Corporation’s investment properties consists of office buildings rented out to third parties. Particulars Less - Depreciation Particulars Rental Income derived from Investment Properties Profit arising from Investment Properties before other direct operating expenses Information regarding Income and Expenditure of Investment Property property are categorised as Level 2 in the fair valuation hierarchy and has been determined by external, independent property valuers, having appropriate recognized independent external, property valuers, hierarchy and has been determined by valuation 2 in the fair Level categorised as property are professional qualifications and recent experience in the location category of property being valued. Other direct operating expenses on the investment property are not separately identifiable and same likely to be material. 31 at As N ote 4 I nvestment P roperty
206 Bharat Petroleum Corporation Limited 50.23 25.81 22.88 28.41 50.60 50.77 228.70 As at ` in Crores 31/03/2019 37.94 23.09 21.68 27.55 47.05 228.70 262.93 105.62 As at Net Carrying Amount 31/03/2020 - 2.97 9.43 98.10 63.26 39.09 16.13 130.88 Up to 31/03/2020 - - - - - 0.01 0.39 0.39 Deletions Reclassifications/ -
Amortization 2.33 7.26 2.85 3.73 33.57 17.00 33.17 year For the - 1.03 6.58 64.54 46.26 31.83 12.40 98.10 Up to 31/03/2019 396.62 396.62 363.10 As at ` in Crores 26.06 60.77 36.98 63.18 326.80 393.81 101.20 105.62 As at 31/03/2020 31/03/2020 - - - - 0.25 0.78 0.05 0.83 0.01 0.74 0.01 Asset/ Deletions Deletions as Intangible Reclassifications/ Capitalizations ------
0.03 0.01 33.53 33.53 Gross Amount Gross Block Other Adjustments Additions [Refer Note No. 55] - 4.71 6.11 1.99 0.18 44.97 54.85 67.84 Additions 363.10 363.83 363.10 As at 96.49 26.84 54.71 34.99 63.00 50.77 01/04/2019 282.05 326.80 As at 01/04/2019
Years) (No. of Useful Life Upto 5 Upto 30 Upto 5 Upto 30 20 Indefinite
Previous Year Total Service Concession Arrangements Process Licenses Right to use Software/ Licenses Process Licenses Right of Way [Refer Note No. 48] Particulars Total Particulars Previous Year Right of Way N ote 5 O ther I ntangible assets N ote 6 I ntangible A ssets U nder D evelopment There are no internally generated intangible assets.
Annual Report 2019-20 207 Additional information in respect of Note no. 2 to 6: a) Land: i) Freehold land includes ` 429.20 Crores (Previous year ` 295.04 Crores) capitalized at various locations for which conveyance deeds are yet to be executed and/or mutation is pending. ii) Freehold land includes ` 2.20 Crores (Previous year ` 2.20 Crores), which is under dispute and not in the Company’s possession, is in the process of being surrendered to the Competent Authority. b) Buildings include Ownership flats having gross block of ` 42.68 Crores (Previous year ` 42.68 Crores) in proposed / existing co-operative societies and others. c) Other adjustments include capitalization of foreign exchange differences (net) of ` 619.09 Crores (Previous year ` 411.53 Crores) and borrowing costs of ` 32.34 Crores (Previous year ` 7.33 Crores). d) Freehold Land, Plant and Equipment, Tanks and Pipelines, Railway Sidings, Buildings etc. jointly owned in varying extent with other Oil Companies / Railways: Gross Block ` 580.31 Crores (Previous year ` 222.85 Crores), Cumulative Depreciation ` 57.44 Crores (Previous year ` 41.07 Crores), Net Block ` 522.87 Crores (Previous year ` 181.78 Crores). e) Certain assets forming part of Property, Plant and Equipment have been constructed by the Corporation at Railway consumer depots, having net carrying amount of ` 22.54 Crores (Previous year ` 23.96 Crores), out of which few Railway consumer depots are being used by other oil companies based on award of tender by Railways, net carrying amount of such assets is ` 1.92 Crores (Previous year ` 2.07 Crores). f) Charge has been created over the Property, Plant & Equipment of the Corporation, mainly Plant and Machinery at Mumbai Refinery and Kochi Refinery in regard to the borrowings– Refer Note No. 25. g) Compensation received from third parties in respect of items of Property, Plant and Equipment / Capital work in progress that were impaired, lost or given up during the year ` 8.40 Crores (previous year ` 92.20 Crores) h) Gross Block reclassifications / deductions includes: i) Decapitalization of ` 56.57 Crores (Previous year ` 97.33 Crores) ii) On account of retirement / disposal during the year ` 423.26 Crores (Previous year ` 81.66 Crores) iii) Deduction on account of reclassification during the year ` 30.82 Crores (Previous year ` 2.99 Crores) i) Depreciation and amortization for the year is ` 3,805.07 Crores (Previous year ` 3,199.11 Crores) from which, after reducing: i) Depreciation on decapitalization of ` 14.57 Crores (Previous year ` 9.48 Crores) and ii) Depreciation on reclassification of assets of ` 3.61 Crores (Previous year ` 0.35 Crores) Net Depreciation and amortization for the year charged to Statement of Profit and Loss is ` 3,786.89 Crores (Previous year ` 3,189.28 Crores) j) Deduction from accumulated depreciation on account of retirement / disposal during the year is ` 179.99 Crores (Previous year ` 42.77 Crores) k) The Corporation has assessed the useful life of Right of Way as indefinite where the same is perpetual in nature. l) Net Carrying amount of Property, Plant and Equipment ` 32.61 Crores as on 31st March 2020 (Previous year: NIL) have been classified under Assets included in disposal group held-for-sale pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL). (Refer Note No. 22 (a) and 68) m) The residual value of LPG cylinders and Pressure Regulators have been revised and estimated at 15% of the original cost (Previous year upto 5% of the original cost) based on the historical experience and internal technical assessment. The impact of change in residual value has resulted in decrease in depreciation of ` 64.42 Crores for FY 2019-20.
208 Bharat Petroleum Corporation Limited Note 7 INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES No. of units ` in Crores Particulars As at As at As at As at 31/03/2020 31/03/2019 31/03/2020 31/03/2019 Investment in Subsidiaries Unquoted Equity shares of [` 10 each (Fully Paid up)] Numaligarh Refinery Limited 45,35,45,998 45,35,45,998 453.55 453.55 (Refer Note No. 70) Bharat PetroResources Limited # 5,00,00,00,000 5,00,00,00,000 5,494.41 5,494.41 Bharat Gas Resources Limited 30,86,20,000 16,00,00,000 308.62 160.00 Investment in Joint Ventures Unquoted Equity Shares of [` 10 each (Fully Paid up)] Bharat Oman Refineries Limited (BORL)## 1,53,82,16,114 88,86,13,336 1,538.61 888.61 Delhi Aviation Fuel Facility Private Limited 6,06,80,000 6,06,80,000 60.68 60.68 Maharashtra Natural Gas Limited* 2,24,99,600 2,24,99,600 - - Sabarmati Gas Limited* 99,87,400 99,87,400 - - Central UP Gas Limited* 1,49,99,600 1,49,99,600 - - Bharat Stars Services Pvt. Ltd 1,00,00,000 1,00,00,000 10.00 10.00 Bharat Renewable Energy Ltd 33,60,000 33,60,000 3.36 3.36 Mumbai Aviation Fuel Farm Facility Pvt Ltd 4,82,88,750 4,82,88,750 48.29 48.29 Kochi Salem Pipeline Private Limited 15,25,00,000 9,62,50,000 152.50 96.25 BPCL-KIAL Fuel Farm Facility Private Limited 66,60,000 66,60,000 6.66 6.66 Haridwar Natural Gas Private Limited* 2,22,00,000 1,25,00,000 - - Goa Natural Gas Private Limited* 1,75,00,000 95,00,000 - - Ratnagiri Refinery & Petrochemical Ltd 5,00,00,000 2,50,00,000 50.00 25.00 IHB Pvt Ltd. 2,62,50,000 - 26.25 - Equity Shares of [USD 1 each (Fully Paid up)] Matrix Bharat Pte. Ltd. 20,00,000 20,00,000 8.41 8.41 Share warrants of BORL - of ` 10 each (Fully Paid up) 48,68,86,664 48,68,86,664 486.89 486.89 - of ` 15 each (Fully Paid up) 29,91,94,364 29,91,94,364 448.79 448.79 - of ` 18 each (Fully Paid up)## - 36,11,11,111 - 650.00
0% Compulsorily Convertible Debenture of 1,00,00,00,000 1,00,00,00,000 1,000.00 1,000.00 ` 10 each (Fully Paid up) of BORL
Investment in Associates Quoted Equity Shares Petronet LNG Limited [`10 each (Fully Paid 18,75,00,000 18,75,00,000 - - up)]* Indraprastha Gas Limited [` 2 each (Fully Paid 15,75,00,400 15,75,00,400 - - up)]*
Annual Report 2019-20 209 Note 7 INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES (Contd.) No. of units ` in Crores Particulars As at As at As at As at 31/03/2020 31/03/2019 31/03/2020 31/03/2019 Unquoted Equity Shares of [` 10 each (Fully Paid up)] GSPL India Gasnet Ltd.* 10,36,22,128 5,08,22,128 - - GSPL India Transco Ltd.* 5,41,20,000 4,19,10,000 - - Petronet CI Limited 15,84,000 15,84,000 1.58 1.58 Fino PayTech Ltd 2,84,35,423 2,84,35,423 251.00 251.00 Equity Shares of [` 0.10 each (Fully Paid up)] Petronet India Limited 1,60,00,000 1,60,00,000 0.16 0.16 Equity Shares of (` 100 each (Fully Paid up)) Kannur International Airport Limited 2,16,80,000 2,16,80,000 216.80 216.80 Unquoted - Association of Persons Capital Contribution in Petroleum India - 0.10 International ^ Impairment in the value of investments Bharat Renewable Energy Ltd (3.36) (3.36) Petronet CI Limited (1.58) (1.58) Total 10,561.62 10,305.60
Aggregate amount of Unquoted Securities 10,561.62 10,305.60 Aggregate amount of Impairment in the value 4.94 4.94 of investments
# Includes equity component of ` 494.40 Crores (Previous year ` 494.40 Crores) recognized on fair valuation of concessional rate loan given to subsidiary. ## 36,11,11,111 warrants issued by BORL to BPCL have been converted to 64,96,02,778 equity shares of BORL during the year. * Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), the investments in Maharashtra Natural Gas Ltd., Sabarmati Gas Ltd., Central UP Gas Ltd., Haridwar Natural Gas Pvt. Ltd., Goa Natural Gas Pvt. Ltd., Petronet LNG Ltd., Indraprastha Gas Ltd., GSPL India Gasnet Ltd. and GSPL India Transco Ltd. whose carrying amount as on 31st March 2020 is ` 487.59 Crores (Previous year ` 404.88 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 22 (a) and 68). ^ Member Companies of Association of Persons (AOP) were Bharat Petroleum Corporation Limited, Engineers India Limited, Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited, Reliance Industries Limited, Chennai Petroleum Corporation Limited, Oil and Natural Gas Corporation Limited and Oil India Limited. The total capital was ` 0.55 crore of which share of Bharat Petroleum Corporation Limited was ` 0.10 crore, Indian Oil Corporation Limited was ` 0.15 crore and other members have equal share of ` 0.05 crore each. During the year 2019-20 AOP has been dissolved and the capital contribution has been received by the corporation.
210 Bharat Petroleum Corporation Limited Note 8 INVESTMENTS No. of units ` in Crores Particulars AS at As at As at As at 31/03/2020 31/03/2019 31/03/2020 31/03/2019 Investment in equity instruments designated at Fair Value Through Other Comprehensive Income Equity Shares of (` 10 each (Fully Paid up)) Quoted Oil India Limited * 2,67,50,550 2,67,50,550 221.23 495.82 Unquoted Cochin International Airport Limited * 1,31,25,000 1,31,25,000 66.62 114.30
Investment in Debentures at Amortized cost Unquoted 5% Debentures (Fully Paid up) of 1 1 0.01 0.01 East India Clinic Limited
Investment in Equity Instruments designated at Fair Value Through Profit or Loss Unquoted Equity Shares of Kochi Refineries Employees 500 500 # # Consumer Co-operative Society Limited (Fully Paid up) # Value ` 5,000 Ordinary Shares (Fully Paid up) of Sindhu 6 6 ## ## Resettlement Corporation Limited ## Value ` 19,000
Total 287.86 610.13
Aggregate amount of Unquoted Securities 66.63 114.31 Aggregate amount of Quoted Securities 221.23 495.82 Market value of Quoted Securities 221.23 495.82 Aggregate amount of Impairment in the value - - of investments * The Corporation has designated these investments at Fair Value Through Other Comprehensive Income because these investments represent the investments that the Corporation intends to hold for long-term purposes. No such investments were disposed off during the year and accordingly, there have been no transfers of the cumulative gains or losses on these investments.
Annual Report 2019-20 211 Note 9 LOANS (Unsecured, considered good unless otherwise stated) ` in Crores Particulars As at As at 31/03/2020 31/03/2019 Security deposits Considered good # 111.38 127.43 Credit impaired 0.98 0.59 Less : Loss Allowance (0.98) (0.59) Loans to subsidiaries Loan to Bharat PetroResources Limited 2,562.40 688.49 Loans to Joint Ventures Bharat Oman Refineries Limited 1,254.10 1,254.10 Loans to employees (including accrued interest) (secured) (Refer Note No. 52) 421.04 391.32 Loans to others Considered good* 1,094.02 54.32 Credit impaired 1.90 2.08 Less: Loss Allowance (1.90) (2.08)
Total 5,442.94 2,515.66 * The balance as at 31st March 2020 includes ` 1,022.27 Crores pertaining to Loans given to Consumers under Pradhan Mantri Ujjwala Yojana scheme. Effective 1st August 2019, the recovery period on these loans has been deferred for one year. [Refer Note No. 18] # Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Security Deposits whose carrying amount as on 31st March 2020 is ` 0.35 Crores (Previous year ` 0.33 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 22 (a) and 68).
212 Bharat Petroleum Corporation Limited Note 10 OTHER FINANCIAL ASSETS (Unsecured, considered good unless otherwise stated) ` in Crores Particulars As at As at 31/03/2020 31/03/2019 Claims Considered good 4.43 12.34 Considered doubtful 22.38 18.34 Less : Allowances for doubtful (22.38) (18.34)
Bank deposits with more than twelve months maturity Considered good* 3.87 1.00 Considered doubtful 0.02 0.02 Less: Allowance for doubtful (0.02) (0.02)
Advances against Equity to Joint Ventures # Bharat Renewable Energy Limited 0.54 0.54 Less : Allowance for doubtful (0.54) (0.54) Advances against Equity to Subsidiary # Bharat Gas Resources Limited - 8.62 Total 8.30 21.96 * Includes deposits of ` 3.87 Crores (Previous year ` 0.99 Crores) that have been pledged / deposited with local authorities. # Advance against equity shares (pending allotment).
Note 11 INCOME TAX ASSETS (NET) ` in Crores Particulars As at As at 31/03/2020 31/03/2019
Advance Payment of Income Tax (Net of provision) 1,381.25 449.40 Total 1,381.25 449.40
Annual Report 2019-20 213 Note 12 OTHER NON-CURRENT ASSETS (Unsecured, considered good unless otherwise stated) ` in Crores Particulars As at As at 31/03/2020 31/03/2019 Capital advances* 153.18 132.95 Advance to Associates Petronet LNG Limited* - - Advance to Employee Benefit Trusts (Refer Note No. 50) 190.36 - Prepaid Expenses 357.53 888.36 Claims and Deposits : Considered good 566.88 512.09 Considered doubtful 140.57 139.69 Less : Allowance for doubtful (140.57) (139.69) Total 1,267.95 1,533.40
* Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Capital Advances as on 31st March 2020 of ` 9.66 Crores (Previous year ` 0.02 Crores) and Advance to Associate (Petronet LNG Limited) as on 31st March 2020 of ` 124.90 Crores (Previous year ` 143.87 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 22 (a) and 68)
Note 13 INVENTORIES (Refer Note No. 1.10) ` in Crores Particulars As at As at 31/03/2020 31/03/2019 Raw materials 3,137.95 3,843.86 [Including in transit ` 1,206.52 Crores (Previous Year ` 1,245.76 Crores)] Work-in-progress 725.32 1,156.10 Finished goods* 10,180.27 9,593.83 Stock-in-trade* 5,513.20 6,235.19 [Including in transit ` 1,107.52 Crores (Previous Year ` 1,040.59 Crores)] Stores and spares 843.99 693.96 [Including in transit ` 8.38 Crores (Previous year ` 7.43 Crores)] Packaging material 20.33 21.71 Total 20,421.06 21,544.65
The write-down of inventories to net realizable value during the year amounted to ` 1,080.83 Crores (Previous year ` 73.14 Crores). The reversal of write downs during the year amounted to ` 0.36 Lakhs (Previous year ` 21.83 Crores) due to increase in net realizable value of the inventories. The write downs and reversal have been adjusted in cost of materials consumed or changes in inventories of finished goods, stock-in-trade and work-in-progress & have been grouped under exceptional item for the current year. * Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Finished goods as on 31st March 2020 of ` 0.01 Crores (Previous year Nil) & Stock- In - Trade as on 31st March 2020 of ` 78.22 Crores (Previous year ` 81.14 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 22 (a) and 68). Inventories pledged as collateral - Refer Note No. 30
214 Bharat Petroleum Corporation Limited Note 14 INVESTMENTS ` in Crores Particulars As at As at 31/03/2020 31/03/2019 Investments at Fair Value Through Profit and Loss
Investments in Government Securities of Face Value ` 100 each (Fully Paid up) Quoted
6.35% Oil Marketing Companies GOI Special Bonds 2024 2,133.15 2,020.57 6.90% Oil Marketing Companies GOI Special Bonds 2026# 1,696.86 1,922.94 7.95% Oil Marketing Companies GOI Special Bonds 2025 11.51 11.02 8.20% Oil Marketing Companies GOI Special Bonds 2024 968.48 930.41 7.59% Government Stock 2026# 398.54 190.95 Total 5,208.54 5,075.89 # Kept as Collateral Security with Clearing Corporation of India Limited for borrowing in Triparty Repo Settlement System of Face Value ` 1,220 Crores (Previous year ` 1,385 Crores) (Refer Note No. 30) Aggregate amount of Quoted Securities 5,208.54 5,075.89 Market value of Quoted Securities 5,208.54 5,075.89 Aggregate amount of Impairment in the value of investments - -
Note 15 TRADE RECEIVABLES (Unsecured unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019
Considered good * # 5,357.24 6,845.56 Less: Loss Allowance (192.90) (174.84) Total 5,164.34 6,670.72
* Includes debts secured by Bank guarantee/Letter of Credit/Deposit ` 513.36 Crores (Previous year ` 566.66 Crores). Trade receivables pledged as collateral (Refer Note No. 30) # Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Trade Receivables as on 31st March 2020 of ` 148.70 Crores (Previous year ` 107.15 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 22 (a) and 68)
Annual Report 2019-20 215 Note 16 CASH AND CASH EQUIVALENTS ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Balances with Banks: On Current Account 86.09 20.53 Cheques and drafts on hand 6.10 24.70 Cash on hand 6.08 33.26 Total 98.27 78.49
Note 17 BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS ` in Crores As at As at Particulars 31/03/2020 31/03/2019
Balances with banks Deposits with banks with original maturity of 3 - 12 months # 0.53 0.31 Earmarked Balances Unpaid Dividend 16.98 16.61 Total 17.51 16.92
# Includes deposits of ` 0.53 Crores (Previous year : ` 0.31 Crores) that has been pledged / deposited with Local Authorities/Court.
Note 18 LOANS (Unsecured, considered good unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019
Loans to employees [(including accrued interest) (Secured) (Refer Note No. 52)] 75.92 70.54
Loans to Others* Considered Good 528.19 1,643.74 Significant increase in credit risk 65.52 151.72 Credit impaired 17.95 6.70 Less: Loss Allowance (97.00) (243.82) Total 590.58 1,628.88
* Includes ` 588.81 Crores (Previous year ` 1,792.70 Crores) pertaining to Loans given to Consumers under Pradhan Mantri Ujjwala Yojana scheme. Effective 1st August 2019, the recovery period on these loans has been deferred for one year. [Refer Note No. 9].
216 Bharat Petroleum Corporation Limited Note 19 OTHER FINANCIAL ASSETS ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Bank deposits with remaining maturity of less than 12 months - 10.95 Interest accrued on bank deposits, etc. Considered good 0.05 4.90 Considered doubtful 0.02 0.02 Less: Allowance for doubtful (0.02) (0.02) Interest Accrued on Loans to Related Parties 108.39 56.16 Derivative asset 15.83 23.72 Receivable from Central Government/State Government Considered good 6,020.85 8,651.69 Considered doubtful 86.13 143.51 Less: Allowance for doubtful (86.13) (143.51) Dues from Related parties Dues from subsidiaries 23.98 9.40 Dues from Joint Venture Companies 22.36 14.76 Advances and recoverables Considered good 619.78 661.75 Considered doubtful 99.95 85.93 Less : Allowance for doubtful (99.95) (85.93) Total 6,811.24 9,433.33
Note 20 CURRENT TAX ASSETS (NET) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advance Income Tax (Net of provision for taxation) 0.17 - Total 0.17 -
Note 21 OTHER CURRENT ASSETS ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advances other than Capital Advances Other advances including prepaid expenses* Considered good 464.78 208.00 Considered doubtful 20.15 21.41 Less : Allowance for doubtful (20.15) (21.41) Claims 314.05 315.07 Recoverables from Customs, Excise, etc. 766.85 708.43 Total 1,545.68 1,231.50 * Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Other Advances including Prepaid expenses as on 31st March 2020 of ` 18.30 Crores (Previous year ` 20.25 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 22 (a) and 68).
Annual Report 2019-20 217 Note 22 (a) ASSETS HELD-FOR-SALE AND ASSETS INCLUDED IN DISPOSAL GROUP HELD-FOR-SALE ` in Crores As at As at Particulars 31/03/2020 31/03/2019
Assets Held for Sale * 20.35 12.61 Assets included in disposal group held-for-sale# 1,185.49 944.26 Total 1,205.84 956.87
*Non-current assets held for sale consists of items such as Plant and equipment, Dispensing pumps, etc. which have been identified for disposal due to replacement/ obsolescence of assets which happens in the normal course of business. These assets are expected to be disposed off within the next twelve months. On account of re-classification of these assets, an impairment loss of ` 53.26 Crores during the year (Previous year ` 7.67 Crores) has been recognized in the Statement of Profit and Loss. # Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Assets as on 31st March 2020 of ` 1,185.49 Crores (Previous year ` 944.26 Crores) have been classified under Assets included in disposal group held-for-sale. (Refer Note No. 68). The transfer of business undertaking from BPCL to BGRL is approved in the nature of slump Sale based on Book values as applicable on the date mentioned in Business Transfer Agreement (BTA). Under Slump sale, all the assets and liabilities including the investment in specified natural gas ventures forming part of Gas business are to be transferred to BGRL. The transfer is expected to be undertaken in FY 2020-21.
Note 22 (b) LIABILITIES INCLUDED IN DISPOSAL GROUP HELD-FOR-SALE ` in Crores As at As at Particulars 31/03/2020 31/03/2019
Liabilities included in disposal group held-for-sale* 534.57 230.55 Total 534.57 230.55
* Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Liabilities as on 31st March 2020 of ` 534.57 Crores directly associated with assets held for sale (Previous year ` 230.55 Crores) have been classified under Liabilities included in disposal group held-for-sale. (Refer Note No. 68).
The transfer of business undertaking from BPCL to BGRL is approved in the nature of slump Sale based on Book values as applicable on the date mentioned in Business Transfer Agreement (BTA). Under Slump sale, all the assets and liabilities including the investment in specified natural gas ventures forming part of Gas business are to be transferred to BGRL. The transfer is expected to be undertaken in FY 2020-21.
218 Bharat Petroleum Corporation Limited Note 23 EQUITY SHARE CAPITAL ` in Crores As at As at Particulars 31/03/2020 31/03/2019 i. Authorized* 2,63,50,00,000 equity shares 2,635.00 2,635.00 (previous year 2,63,50,00,000 equity shares) ii. Issued, subscribed and paid-up 2,16,92,52,744 (Previous year 2,16,92,52,744) equity shares fully paid-up 2,169.25 2,169.25 Less - BPCL Trust for Investment in Shares (Refer Note No. 45) (202.37) (202.37) Total 1,966.88 1,966.88
*Pursuant to Merger with Petronet CCK Limited, during FY 2018-19, the authorized capital was increased to ` 2,635 Crores from ` 2,500 Crores. iii. The Corporation has only one class of shares namely equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per equity share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of equity shares held. The Corporation declares and pays dividend in Indian Rupees. The final dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. iv. During the Financial year 2017-18, the Corporation has issued Bonus Shares in the ratio of 1:2 by capitalization of General Reserves. The total number of shares issued is 72,30,84,248 having face value of ` 10 each. During the Financial year 2016-17, the Corporation has issued Bonus Shares in the ratio of 1:1 by capitalization of General Reserves. The total number of shares issued is 72,30,84,248 having face value of ` 10 each. v. Reconciliation of No. of Equity Shares As at As at Particulars 31/03/2020 31/03/2019 A. Opening Balance 2,169,252,744 2,169,252,744 B. Shares Issued - Bonus Shares - - C. Shares Bought Back - - D. Closing Balance 2,169,252,744 2,169,252,744 vi. Details of shareholders holding more than 5% shares As at 31/03/2020 As at 31/03/2019 Name of Shareholder % Holding No. of Shares % Holding No. of Shares Government of India 52.98 1,149,183,592 53.29 1,156,095,962 BPCL Trust for Investment in Shares 9.33 202,372,422 9.33 202,372,422 (Refer Note No. 45) Life Insurance Corporation of India 5.58 121,058,023 5.88 127,497,778
Annual Report 2019-20 219 Note 24 OTHER EQUITY ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Capital Reserve (20.76) (20.76) Debenture Redemption Reserve 1,076.36 1,160.55 General Reserve 29,481.77 29,104.37 Foreign Currency Monetary Item Translation Difference Account (Refer Note No. 55) - (29.34) Equity Instruments through Other Comprehensive Income (297.52) 15.41 Retained Earnings 1,464.39 4,997.31 BPCL Trust for Investment in Shares (Refer Note No.45) (456.74) (456.74) Total 31,247.50 34,770.80
As at As at Particulars 31/03/2020 31/03/2019 Capital Reserve : Opening balance (20.76) (20.76) Add/(Less) : Additions/(Deletions) during the year - - Closing balance (20.76) (20.76) Debenture Redemption Reserve : Opening balance 1,160.55 1,108.56 Add : Transfer from Retained Earnings 293.21 295.91 Less: Transfer to General Reserve (377.40) (243.92) Closing balance 1,076.36 1,160.55 General Reserve : Opening balance 29,104.37 26,360.45 Add : Transfer from Debenture Redemption Reserve 377.40 243.92 Add : Transfer from Retained Earnings - 2,500.00 Closing balance 29,481.77 29,104.37 Foreign Currency Monetary Item Translation Difference Account : (Refer Note No. 55) Opening balance (29.34) 66.76 Additions / (Deletions) during the year (51.62) (162.82) Additions / (Deletions) on account of Amortization during the year 80.96 66.72 Closing balance - (29.34) Equity Instruments through Other Comprehensive Income : Opening balance 15.41 78.99 Additions / (Deletions) during the year (312.93) (63.58) Closing balance (297.52) 15.41 BPCL Trust for Investment in Shares: (Refer Note No. 45) Opening balance (456.74) (456.74) Additions / (Deletions) during the year - - Closing balance (456.74) (456.74)
220 Bharat Petroleum Corporation Limited Note 24 OTHER EQUITY (Contd.) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Retained Earnings : Opening balance 4,997.31 5,027.35 Transfer to Deferred Income on account of implementation of Ind AS 115 (net of tax) - (39.79) Opening balance after the above effect 4,997.31 4,987.56 Add : Profit/(Loss) for the year as per Statement of Profit and Loss 2,683.19 7,132.02 Less : Remeasurements of defined benefit plans (net of tax) (185.06) (138.02) Less : Transfer to Debenture Redemption Reserve (293.21) (295.91) Less : Transfer to General Reserve - (2,500.00) Less : Interim Dividends for the year: ` 16.50 per share (Previous year : ` 11 per (3,579.27) (2,386.18) share) Less : Dividend Distribution Tax on Interim Dividends for the year (595.89) (359.97) Less : Final Dividend for FY 2018-19 ` 8 per share (Previous year: ` 7 per share) (1,735.40) (1,518.48) Less: Dividend Distribution Tax on Final Dividend for previous year (327.54) (287.98) Add: Dividend Distribution tax pertaining to previous years 4.45 - Add : Income from BPCL Trust for Investment in Shares (Refer Note No. 45) 495.81 364.27 Closing balance* 1,464.39 4,997.31 Total 31,247.50 34,770.80 *The balance includes accumulated (loss)/gain on account of Remeasurements of defined benefit plans (Net of tax) as on 31st March 2020 ` (442.62) Crores [Previous year ` (257.56) Crores] Nature and purpose of Reserves Capital Reserve It represents capital reserve appearing in the financial statements of erstwhile Kochi Refineries Limited (KRL) transferred on amalgamation and difference between the investment made in Petronet CCK Limited (PCCKL) and the share capital received during the acquisition when the first time control is obtained. Debenture Redemption Reserve Debenture redemption reserve represents reserve created out of the profits of the Corporation available for distribution to shareholders which is utilized for redemption of debentures/bonds. General Reserve General Reserve represents appropriation of retained earnings and are available for distribution to shareholders. Foreign Currency Monetary Item Translation Difference Account Foreign Currency Monetary Item Translation Difference Account represents amounts recognized on account of translation of long term foreign currency denominated borrowings not related to acquisition of depreciable assets. Amounts so recognized are amortized in the Statement of Profit and Loss over remaining maturity of related borrowings. Retained Earnings Retained Earnings (excluding accumulated balance of remeasurements of defined benefit plans (net of tax)) represents surplus/accumulated earnings of the Corporation and are available for distribution to shareholders. ` in Crores Proposed Dividends on Equity Shares not recognized: 2019-20 2018-19 Final Dividend for the year [Nil per share (Previous year ` 8 per share)] - 1,735.40 Dividend Distribution Tax on Proposed Dividend - 356.72 Total - 2,092.12
Annual Report 2019-20 221 Note 25 BORROWINGS ` in Crores As at 31/03/2020 As at 31/03/2019 Particulars Current # Non-Current Current # Non-Current Secured From others Debentures 7.35% Secured Non-Convertible Debentures 2022 * - 549.92 - 549.88 Term Loan Loan from Oil Industry Development Board ** 397.56 789.75 499.44 859.06 Unsecured From banks Foreign Currency Loans - Syndicated 3,241.29 5,622.90 - 8,108.55 Term loan 33.35 466.65 - 2,000.00 From Others Debentures 7.69% Unsecured Non-Convertible Debentures 2023 - 749.80 - 749.73 8.02% Unsecured Non-Convertible Debentures 2024 - 999.76 - 999.71 Bonds 4% US Dollar International Bonds 2025 - 3,748.49 - 3,436.12 4.625% US Dollar International Bonds 2022 - 3,760.46 - 3,447.27 4.375% US Dollar International Bond 2022 - 3,762.34 - 3,448.98 3% Swiss Franc International Bonds 2019 - - 1,390.54 - Term Loan Interest Free Loan from Govt. of Kerala - 31.76 - 29.27 Lease obligation (Refer Note No. 49)## 152.42 5,790.87 - - Total 3,824.62 26,272.70 1,889.98 23,628.57
# Classified under Other Financial Liabilities (Refer Note No. 32)
Terms of Repayment Schedule of Long-term borrowings (Gross Amount) as on 31/03/2020 : Coupon Rate of ` in Crores Maturity Non-Current Interest Interest Free Loan from Govt. of Kerala - 100.00 30-Mar-34 4% US Dollar International Bonds 2025 4.00% 3,769.30 8-May-25 Loan from Oil Industry Development Board - Secured 7.00% 82.06 26-Jul-24 Term Loan MCLR based 366.60 15-Mar-24 8.02% Unsecured Non-Convertible Debentures 2024 8.02% 1,000.00 11-Mar-24 Foreign Currency Loans USD 450 Million - Syndicated Libor based 3,392.37 11-Jan-24 Foreign Currency Loans USD 300 Million - Syndicated Libor based 2,261.58 5-Dec-23 Loan from Oil Industry Development Board - Secured 7.00%-7.22% 207.06 Jul 23 to Mar 24 Term Loan MCLR based 33.35 15-Apr-23 Loan from Oil Industry Development Board - Secured 7.00%-7.22% 207.06 Jul 22 to Mar 23 7.69% Unsecured Non-Convertible Debentures 2023 7.69% 750.00 16-Jan-23 4.625% US Dollar International Bonds 2022 4.625% 3,769.30 25-Oct-22
222 Bharat Petroleum Corporation Limited Note 25 BORROWINGS (Contd.)
Terms of Repayment Schedule of Long-term borrowings (Gross Amount) as on 31/03/2020 : (CONTD.) Coupon Rate of ` in Crores Maturity Non-Current Interest Term Loan MCLR based 33.35 15-Apr-22 7.35% Secured Non-Convertible Debentures 2022 7.35% 550.00 10-Mar-22 4.375% US Dollar International Bond 2022 4.375% 3,769.30 24-Jan-22 Loan from Oil Industry Development Board - Secured 7.00% - 8.07% 293.56 July 21 to Mar 22 Term Loan MCLR based 33.35 15-Apr-21
Coupon Rate of ` in Crores Maturity Current Interest Foreign Currency Loans USD 330 Million - Syndicated Libor based 2,487.73 26-Feb-21 Foreign Currency Loans USD 100 Million-Syndicated Libor based 753.86 6-Nov-20 Loan from Oil Industry Development Board - Secured 7.87% - 9.11% 397.56 July 20 to Mar 21 Term Loan MCLR based 33.35 15-Apr-20
* The Corporation had allotted non-convertible 7.35% Debentures of face value of ` 550 Crores on 10th March 2017 redeemable on 10th March 2022. These were secured by first legal mortgage by way of a Registered Debenture Trust Deed over the fixed assets of the Company, mainly Plant and Machinery at Mumbai Refinery. ** These are secured by first legal mortgage over the Plant and Machinery of the Corporation, mainly Plant and Machinery at Mumbai Refinery and Kochi Refinery.
## Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Lease obligation as on 31st March 2020 of ` 3.23 Crores (Previous year Nil) have been classified under Liabilities included in disposal group held-for-sale. (Refer Note No. 22 (b) and 68).
Note 26 OTHER FINANCIAL LIABILITIES ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Security/Earnest Money Deposits 4.71 3.20 Retiral Dues 49.28 53.28 Total 53.99 56.48
Note 27 PROVISIONS ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Provision for employee benefits (Refer Note No. 50) 1,574.12 1,509.86 Total 1,574.12 1,509.86
Annual Report 2019-20 223 - (39.79) (87.88) (87.88) (63.58) (39.79) (138.02) (201.60) 3,307.60 2,079.00 1,316.48 ` in Crores ` in Crores ` in Crores 2018-19 Net of tax Net of tax 7.50 21.37 81.64 21.37 74.14 201.00 400.68 (12.15) (120.20) (613.83) (493.63) benefit benefit 2019-20 2018-19 2018-19 Tax (expense) Tax (expense) (61.16) (71.08) (61.16) (212.16) (283.24) Before tax Before tax - - (185.06) (312.93) (497.99) Net of tax Net of tax - - 9.34 99.41 108.75 benefit benefit 2019-20 2019-20 Tax (expense) Tax (expense) - - (284.47) (322.27) (606.74) Before tax Before tax Current tax expense (A) Current year Amounts recognized in profit and loss Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans Equity instruments through Other Comprehensive income- net change in fair value Amounts recognized in other comprehensive income Deferred tax expense (B) Origination and reversal of temporary differences Temporary difference arising on account of implementation Ind on account difference arising Temporary AS 115 Amounts recognized directly in equity Total Short/(Excess) provision of earlier years Short/(Excess) provision of earlier years Tax expense recognized in the income statement (A+B) Short/(Excess) provision of earlier years Total NOTE 28 TAX EXPENSE AND DEFERRED LIABILITIES (NET) (a) (b) Total (c)
224 Bharat Petroleum Corporation Limited ------3.67 (6.34) (8.55) 111.72 (87.88) (38.63) (15.08) (353.04) 3,395.48 3,307.60 3,648.02 10,439.62 (8,268.42) (8,322.13) ` in Crores ` in Crores liability ` in Crores Deferred tax % - - - 2018-19 2.53 0.03% 1.07% -3.38% -0.06% -0.08% 43.03 24.60 49.78 67.41 32.52% 34.94% 388.74 723.10 333.37 582.77 139.51 2,354.84 asset Deferred tax As at 31/03/2020 80.67 (2.92) 601.68 933.37 2.53 (12.15) (13.21) (15.62) 43.03 24.60 49.78 67.41 (613.83) (380.61) 2,671.04 388.74 723.10 333.37 582.77 139.51 (38.63) (15.08) ` in Crores (8,268.42) (5,967.29) Net Balance % 2019-20 ------3.02% -0.49% -0.58% -0.11% 22.53% 34.94% -14.25% Recognized directly in equity ------274.10 258.29 493.63 (38.76) Recognized in Short Excess ------9.34 99.41 in OCI 108.75 Recognized 6.31 3.72 62.02 51.32 23.67 10.77 (4.64) 388.74 201.00 (99.41) (88.77) (92.76) (862.65) (400.68) profit or loss Recognized in - 0.93 as at 54.42 44.79 61.10 (8.24) 248.00 582.77 228.28 320.81 (18.99) (18.80) (7,664.06) (6,168.99) 01/04/2019 Net balance Income Tax Expense Reconciliation of effective tax rate Movement in deferred tax balances Adjustments recognized in current year relation to the tax of prior years Profit before tax Tax using the Company’s domestic tax rate Tax effect of: Non-deductible tax expenses Tax-exempt income Interest expense not deductible for tax purposes Incremental deduction allowed for research and development costs Others Effective Income Tax Rate Tax Assets/(Liabilities) Other items Unabsorbed Depreciation** MAT Credit Entitlement* Employee benefits Deferred income Provisions Other Current liabilities Loans and borrowings Investments Trade and other receivables Derivatives Intangible assets Deferred tax Asset / (Liabilities) Property, plant and equipment NOTE 28 TAX EXPENSE AND DEFERRED LIABILITIES (NET) (C ontd .) (d) (e)
Annual Report 2019-20 225 ------(8.24) (18.80) (18.99) (7,664.06) (7,710.09) ` in Crores liability Deferred tax - - - - 0.93 44.79 61.10 54.42 582.77 228.28 320.81 248.00 1,541.10 asset Deferred tax As at 31/03/2019 0.93 44.79 61.10 54.42 (8.24) 582.77 228.28 320.81 248.00 (18.80) (18.99) (7,664.06) (6,168.99) Net Balance ------` 274.10 Crores has been recognized in FY 2019-20. 21.37 21.37 Recognized directly in equity ------Recognized in Short Excess ------7.50 74.14 81.64 in OCI Recognized 9.39 0.46 2.19 16.46 (7.77) (5.62) 102.91 (30.95) (24.31) (52.06) (895.18) (432.00) (1,316.48) profit or loss Recognized in 0.47 68.24 51.71 30.86 33.07 (0.47) 532.94 125.37 326.43 680.00 (35.26) as at (6,768.88) (4,955.52) 01/04/2018 Net balance 201.00 Crores was recognized in FY 2019-20 as the corporation was liable to pay tax as per provision of Section 115JB of Income Tax Section 115JB of per provision of as tax to pay liable the corporation was recognized in FY 2019-20 as was ` 201.00 Crores Movement in deferred tax balances Investments Deferred tax Asset / (Liabilities) Property, plant and equipment Derivatives Intangible assets Trade and other receivables Loans and borrowings Employee benefits Deferred income (f) Provisions Other Current liabilities MAT Credit Entitlement* Other items Tax assets (Liabilities) Management is confident that it would be in a position to utilize the balance MAT credit entitlement within period specified under Income Tax Act, 1961 ** Corporation has unabsorbed depreciation in FY 2019-20 on which of ` 388.74 crs was recognized. deferred tax asset Management is confident that it would be in a position to utilize the unabsorbed depreciation under Income Tax Act, 1961. NOTE 28 TAX EXPENSE AND DEFERRED LIABILITIES (NET) (C ontd .) The corporation and liabilities offsets tax assets if and only if it enforceable right has a legally to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same authority. credit entitlement of *MAT Act, 1961 in the FY 2019-20. Further due to favourable judgements during credit entitlement of FY 2019-20, MAT Act, 1961 in the FY 2019-20. Further due to favourable
226 Bharat Petroleum Corporation Limited Note 29 OTHER NON-CURRENT LIABILITIES ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Deferred Income and Others * 381.72 284.01 Total 381.72 284.01 *Deferred Income includes unamortized portion of capital grants amounting to ` 132.13 Crores (Previous year ` 141.61 Crores), comprising mainly of works contract tax reimbursement, interest free loan received from Government of Kerala as part of the fiscal incentives sanctioned for IREP and grants received for technology development.
Note 30 BORROWINGS ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Loans repayable on demand Secured From Banks Working capital loans / Cash Credit * 2,196.90 211.12 Foreign Currency Loans 1,206.17 - From Others Loans through Triparty Repo Settlement System (TREPS) of Clearing 999.98 1,000.00 Corporation of India Limited**
Unsecured From Banks Working capital loan 2,400.00 - Commercial Papers 1,594.33 - Foreign Currency Loans 6,460.57 1,632.44 From Others Commercial Paper 2,863.42 737.19
Total 17,721.37 3,580.75
* Secured in favour of the participating banks ranking pari passu inter-alia by hypothecation of raw materials, finished goods, stock- in- process, book debts, stores, components and spares and all movables both present and future. [Refer Note No. 13 and 15] **The Corporation has Triparty Repo Settlement System (TREPS) of Clearing Corporation of India Limited, the balance of which is ` 1,000 Crores (Previous year ` 1,000 Crores). These are secured by 6.90 % Oil Marketing Companies GOI Special Bonds 2026 & 7.59% Govt. Stock 2026 of Face Value ` 1,220 Crores (Previous year ` 1,385 Crores) [Refer Note No. 14].
Annual Report 2019-20 227 Note 31 TRADE PAYABLES ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Total outstanding dues of Micro Enterprises and Small Enterprises 67.17 52.04 (Refer Note No. 62)
Total outstanding dues of creditors other than Micro Enterprises and Small Enterprises Dues to subsidiaries 637.38 1,094.86 Dues to others (Refer Note No. 46)* 11,804.99 16,540.64 12,442.37 17,635.50 Total 12,509.54 17,687.54 *Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Trade Payables as on 31st March 2020 of ` 495.60 Crores (Previous year ` 213.25 Crores) have been classified under Liabilities included in disposal group held-for-sale. (Refer Note No. 22 (b) and 68) Note 32 OTHER FINANCIAL LIABILITIES ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Current maturities of long-term borrowings (Refer Note No. 25) 3,672.20 1,889.98 Current maturities of lease obligations (Refer Note No. 25) 152.42 - Interest accrued but not due on borrowings 256.19 280.30 Security/Earnest Money deposits# 738.44 635.64 Deposits for Containers** 14,669.16 13,758.50 Unclaimed Dividend* 16.98 16.61 Dues to Micro Enterprises and Small Enterprises (Refer Note No. 62) 114.77 150.01 Derivative liability 18.79 180.47 Other Liabilities# 2,833.53 2,214.61 Total 22,472.48 19,126.12 * No amount is due at the end of the period for credit to Investors Education and Protection Fund. # Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Security/Earnest Money Deposits as on 31st March 2020 of ` 0.66 Crores (Previous year ` 0.54 Crores) and Other liabilities as on 31st March 2020 of ` 15.30 Crores (Previous year ` 16.76 Crores) have been classified under Liabilities included in disposal group held-for-sale. (Refer Note No. 22 (b) and 68). ** Includes deposits received under Rajiv Gandhi Gramin LPG Vitrak Yojana and Pradhan Mantri Ujjwala Yojana (Central Scheme) ` 3,286.46 Crores (Previous year ` 2,919.13 Crores). The deposit against these schemes have been funded from CSR fund and Government of India.
228 Bharat Petroleum Corporation Limited Note 33 OTHER CURRENT LIABILITIES ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advances from Customers# 694.55 724.73 Statutory Liabilities 3,139.16 3,810.77 Others (Deferred income etc.) 69.31 78.76 Total 3,903.02 4,614.26
# Pursuant to the Board of Directors decision for transferring the Gas Business to a wholly owned subsidiary Bharat Gas Resources Limited (BGRL), Advance from customers as on 31st March 2020 of ` 19.78 Crores (Previous year ` NIL) have been classified under Liabilities included in disposal group held-for-sale. (Refer Note No. 22 (b) and 68).
Note 34 PROVISIONS ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Provision for employee benefits (Refer Note No. 47 and 50) 1,525.25 1,256.66 Provision for CSR Expenditure (Refer Note No. 58) 25.66 172.25 Others (Refer Note No. 57)* 280.09 318.05 Total 1,831.00 1,746.96 *Above includes deposits/ claims made of ` 107.00 Crores (Previous year ` 123.66 Crores) netted off against provisions. Note 35 CURRENT TAX LIABILITIES (NET) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Current tax liabilities (Net of Taxes paid) 32.80 255.48 Total 32.80 255.48 Note 36 Revenue from operations ` in Crores Particulars 2019-20 2018-19 (A) i) Sales Petroleum products * 3,22,514.35 3,33,629.08 Crude oil 3,588.92 1,842.41 3,26,103.27 3,35,471.49 ii) Subsidy from Central/State Governments [Refer Note No. 44] 290.19 912.96 3,26,393.46 3,36,384.45 (B) Other operating revenues 1,187.32 1,238.08 Total 3,27,580.78 3,37,622.53 * During FY 2019-20, an amount of ` 169.69 Crores recognized in the revenue from operations towards recoverable additional uncompensated costs against LPG sales.
Annual Report 2019-20 229 Note 37 Other income ` in Crores Particulars 2019-20 2018-19 Interest Income on Instruments measured at FVTPL 358.43 357.58 Instruments measured at amortized cost 740.65 649.04 Income Tax Refund - 52.37 Dividend Income Dividend income - Subsidiaries, Joint Ventures and Associates 1,058.83 983.26 Dividend income from non-current equity instruments at FVOCI 32.30 28.69 Net gain on fair value change of Instruments measured at FVTPL^ 291.78 116.34 Derivative at FVTPL - 256.86 Share of profit from association of persons 0.68 0.04 Write back of liabilities no longer required 18.15 9.31 Reversal of allowance on doubtful debts and advances (net) 165.10 - Gain on sale of Property plant and equipment / Non-current assets held for sale - 5.29 (net) Others# 415.39 524.82 Total 3,081.31 2,983.60
^ Includes net gain on sale of investments of ` 26.31 Crores (Previous year ` 27.79 Crores) # Includes amortization of capital grants ` 11.75 Crores (Previous year ` 7.28 Crores)
Note 38 Cost of materials consumed ` in Crores Particulars 2019-20 2018-19 Opening stock 3,843.86 4,972.63 Add : Purchases 1,12,578.36 1,18,290.45 Less: Closing stock (3,137.95) (3,843.86) Gross Total 1,13,284.27 1,19,419.22 Less : Exceptional Items (Refer Note No. 69) (54.97) - Net Total 1,13,229.30 1,19,419.22 Note 39 Purchases of stock-in-trade ` in Crores Particulars 2019-20 2018-19 Petroleum products 1,39,251.16 1,44,814.46 Crude oil 3,588.92 1,842.41 Others 324.17 317.19 Total 1,43,164.25 1,46,974.06
230 Bharat Petroleum Corporation Limited Note 40 Changes in inventories of finished goods, stock-in-trade and work-in-progress ` in Crores Particulars 2019-20 2018-19 Value of opening stock of Finished goods 9,593.83 9,282.92 Stock-in-trade 6,316.33 5,196.89 Stock-in-process 1,156.10 883.39 17,066.26 15,363.20 Less : Value of closing stock of Finished goods 10,180.28 9,593.83 Stock-in-trade 5,591.42 6,316.33 Stock-in-process 725.32 1,156.10 16,497.02 17,066.26 Net (increase) / decrease in inventories including exceptional Items 569.24 (1,703.06) Less: Exceptional Items (Refer Note No. 69) 1,025.86 - Net (increase) / decrease in inventories excluding exceptional items (456.62) (1,703.06) Note 41 Employee benefits expense ` in Crores Particulars 2019-20 2018-19 Salaries and Wages (Refer Note No. 47) 2,687.28 2,821.01 Contribution to Provident and Other funds 547.11 325.42 Staff Welfare Expenses 457.06 517.75 Total 3,691.45 3,664.18 Note 42 Finance costs ` in Crores Particulars 2019-20 2018-19 Interest Expense* 1,624.97 1,107.34 Other Borrowing Costs 31.71 26.91 Interest on income tax demands 6.17 - Exchange differences regarded as an adjustment to borrowing 519.01 184.71 costs Total 2,181.86 1,318.96
*Includes ` 507.82 Crores (Previous Year Nil) recognized during this year as interest cost against Lease obligations as per Ind AS 116.
Annual Report 2019-20 231 Note 43 Other expenses ` in Crores Particulars 2019-20 2018-19 Transportation 7,166.15 6,930.23 Octroi, Other Levies and Irrecoverable Taxes 1,234.06 1,204.38 Repairs, maintenance, stores and spares consumption 1,378.03 1,379.90 Power and fuel 6,089.24 6,997.91 Less: Consumption of fuel out of own production (3,324.81) (4,819.28) Power and fuel consumed (net) 2,764.43 2,178.63 Packages consumed 177.87 210.54 Net losses on fair value changes of Derivatives measured at FVTPL 157.92 - Office Administration, Selling and Other expenses Rent (Refer Note No. 49) 166.07 406.30 Utilities (Refer Note No. 49) 319.70 888.63 Terminaling and related expenses 211.73 205.90 Travelling and conveyance 227.97 231.52 Remuneration to auditors Audit fees 0.58 0.58 Fees for other services - Certification 0.37 0.55 Reimbursement of out of pocket expenses 0.01 0.02 Sub-Total 0.96 1.15 Bad debts and other write offs 82.38 0.83 Allowance for doubtful debts & advances (net) - 323.30 Loss on sale of property plant and equipment / non-current assets held for sale 41.14 - (net) Net losses on foreign currency transactions and translations Exchange losses on foreign currency forwards and principal only swap contracts (185.45) 51.32 Exchange losses on transactions and translations of other foreign currency assets 1,847.79 649.06 and liabilities Sub-Total 1,662.34 700.38 CSR Expenditure (Refer Note No. 58) 198.98 203.32 Impairment loss on Non-current assets held for sale 53.26 7.67 Others 2,272.27 2,083.71 Sub-Total - Office Administration, Selling and Other expenses 5,236.80 5,052.71 Total 18,115.26 16,956.39
232 Bharat Petroleum Corporation Limited Note 44 Consequent to non-revision in retail selling prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered gross under recovery of ` 255.31 Crores (Previous year ` 882.65 Crores) on sale of sensitive petroleum products. As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as subsidy from Government of India amounting to ` 255.31 Crores (Previous year ` 882.65 Crores) and the same is accounted as Revenue from operations. After adjusting the above compensation, the net under recovery absorbed by the Corporation is Nil (Previous year under recovery Nil). Further, subsidies received from State Governments which are recognized in Revenue From Operations is ` 34.88 Crores (Previous year ` 30.31 Crores) during current year. Note 45 As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (“KRL”) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the Financial year 2006-07. After the 1:1 Bonus issue in July 2012 and July 2016 respectively and 1:2 bonus issue in July 2017, presently the trust holds 20,23,72,422 equity shares of the Corporation. The cost of the original investment together with the additional contribution to the corpus of the trust made in 2014-15 has been reduced from the total equity of the Corporation. To the extent of the face value of the shares, the same has been reduced from the Paid up Share capital of the Corporation and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust has been recognized directly under Other Equity of the Corporation. Note 46 The Corporation has numerous transactions with other oil companies. The outstanding balances (included under Trade Payables / Trade Receivables, etc) from them and certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained. Note 47 The Corporation has provided for pay revision dues of non-management staff under salaries and wages amounting to ` 353.02 Crores (Previous year ` 305.95 Crores) based on the available information and judgement. Note 48 Service Concession Arrangements The Corporation has entered into service concession arrangements with entities supplying electricity (“The Regulator”) to construct, own, operate and maintain a wind energy based electric power generating station (”Plant”). Under the terms of agreement, the Corporation will operate and maintain the Plant and sell electricity generated to Regulator for a period which covers the substantial useful life of the Plant which may be renewed for such further period as may be mutually agreed upon between the parties. The Corporation will be responsible for any maintenance services during the concession period. The Corporation in turn has a right to charge the Regulator agreed rate as stated in the service concession arrangement. The fair value towards the construction of the Plant has been recognized as an Intangible Asset and is amortized over the useful life of the asset or period of contract whichever is less.
Annual Report 2019-20 233 Note 49 Leases The Corporation enters into lease arrangements for land, godowns, office premises, staff quarters, third party operating plant, tank lorries, time charter vessels and others. Pursuant to Ministry of Corporate Affairs Notification dated 30th March 2019, Ind AS 116 “Leases” applicable w.e.f 1st April 2019 is adopted by the Corporation using modified retrospective method wherein, at the date of initial application, the Lease Liability is measured at the present value of remaining lease payments and Right-of-use asset has been recognized at an amount equal to Lease Liability adjusted by an amount of any prepaid expenses. Accordingly the comparative information of previous period in Financial Statements has not been restated. Under Ind AS 116 “Leases”, at commencement of lease, the Corporation recognizes Right-of-use asset and corresponding Lease Liability. Right-of-use asset is depreciated over lease term on systematic basis and Interest on Lease Liability is charged to Statement of Profit and Loss as Finance cost. A. Leases as lessee a) The following is the detailed breakup of Right-of-use assets (by class of underlying assets) included in Property, Plant and Equipment (Note No. 2): ` in Crores Particulars Gross Block Depreciation Net Carrying Amount Ind AS Additions Reclassifications As at For the Reclassifications Up to As at 116 / Deductions 31/03/2020 Year / Deductions 31/03/2020 31/03/2020 Transition On Account Of On Account Of Conclusion Conclusion Land 3,073.64 873.98 3.44 3,944.18 173.68 0.25 173.43 3,770.75 Buildings including Roads 11.66 20.31 - 31.97 4.03 - 4.03 27.94 Plant and Equipments 3,226.89 19.48 - 3,246.37 198.20 - 198.20 3,048.17 Tanks and Pipelines 4.96 - - 4.96 1.98 - 1.98 2.98 Vehicles - 0.18 - 0.18 0.07 - 0.07 0.11 Total 6,317.15 913.95 3.44 7,227.66 377.96 0.25 377.71 6,849.95
b) The following expenses have been charged to Statement of Profit and Loss during FY 2019-20
` in Crores Interest on Lease Liabilities 507.82 Expenses relating to short term leases 754.48 Expenses relating to leases of low value items 13.46 Expenses relating to variable lease payments 4,774.15 (not included in measurement of lease liabilities) c) Total Cash outflow for leases during FY 2019-20 is ` 5,680.08 Crores d) Income from Sub leasing of Right-of-use assets recognized in Statement of Profit and Loss during FY 2019-20 is ` 0.71 Crores e) Maturity Analysis of Lease Liabilities as per Ind AS 116 Leases ` in Crores As at 31/03/2020 Contractual cash flows Upto 1 1-3 years 3-5 years More than Total year 5 years Cash outflows 632.33 1,277.61 1,276.89 9,615.85 12,802.68
234 Bharat Petroleum Corporation Limited Note 49 Leases (CONTD.) f) The Corporation had exercised the following transition choices/practical expedients available under Ind AS 116 Leases (i) The Corporation has elected below practical expedients for transition to Ind AS 116 “Leases” 1. Applied this Standard to contracts that were previously identified as containing a lease applying Ind AS 17. 2. Applied a single discount rate to a portfolio of leases with reasonably similar characteristics (such as leases with a similar remaining lease term for a similar class of underlying asset in a similar economic environment). 3. Not to apply the requirements to leases for which the lease term ends within 12 months from the date of initial application. (ii) The Corporation has applied paragraph C5(b) of Appendix C of Ind AS 116 for transition which states that a lessee shall apply this standard to its leases retrospectively with the cumulative effect of initially applying the Standard recognized at the date of initial application. Accordingly, the Corporation measures lease liability at the present value of the remaining lease payments, discounted using the Corporation incremental borrowing rate at the date of initial application. (iii) The Corporation recognizes right-of-use asset at the date of initial application for leases at an amount equal to the lease liability, adjusted by the amount of any prepaid expenses relating to that lease recognized in the balance sheet immediately before the date of initial application. (iv) The Corporation has continued to classify Intangible Assets under the same head as classified as on 31st March 2019 and not separated lease and non-lease components of composite contracts. (v) Transition Impact 1. At the date of initial application i.e. 1st April 2019, the Corporation has recognized ` 5,645.21 Crores as Lease Liabilities in the books of accounts for those leases that were previously identified as leases as per Ind AS 17 Leases computed by discounting remaining lease payments as at 1st April 2019 by weighted average incremental borrowing rate 8.71% based on remaining lease term as on 1st April 2019. 2. Further, on transition,corresponding to lease liability stated above, the Corporation has also recognized Right-of-use assets ` 6,317.15 Crores after including an amount of ` 671.94 Crores recognized as prepaid expenses/revenue advances in the Balance Sheet as at 31st March 2019. 3. The application of this Standard has resulted in a net decrease in profit before tax of FY 2019- 20 by ` 254.14 Crores (Increase in Depreciation & amortization expenses and Finance cost by ` 377.96 Crores and ` 507.82 Crores respectively and decrease in other expenses by ` 631.64 Crores). 4. Reconciliation between Operating lease commitments pertaining to non-cancellable leases disclosed as per Ind AS 17 Leases for FY 2018-19 discounted using incremental borrowing rate at the date of transition and Lease Liabilities recognized in books of accounts is mainly on account of estimated growth rate of CPI/WPI considered while disclosing minimum lease payments of certain leases in FY 2018-19. ` in Crores a. Operating lease commitments pertaining to non-cancellable leases 9,165.94 (As per Ind AS 17 as at 31st March 2019) - b. Short term leases (as per Ind AS 116) - c. Low value items (as per Ind AS 116) - d. Variable Lease payments (as per Ind AS 116) - e. Other adjustments mainly on account of change in CPI/WPI (2,450.38) f. Discounting impact (3,348.62) g. Lease Liability as on 1st April 2019 3,366.94
Annual Report 2019-20 235 Note 49 Leases (CONTD.) B. Leases as lessor Operating Leases a) The Corporation enters into operating lease arrangements in respect of lands, commercial spaces, storage and distribution facilities etc. The details are as follows:
As at 31/03/2020 ` in Crores Particulars Land Buildings Plant and Tanks & Furnitures Office Railway Vehicles ROU Equipments Pipelines and Equipment Sidings Assets Fixtures Gross Carrying 27.07 172.64 113.03 340.14 7.25 14.96 71.98 0.01 0.95 Amount Accumulated - 30.56 41.02 86.39 5.43 5.00 27.80 - 0.12 depreciation Depreciation - 6.78 8.12 14.39 0.36 1.55 5.86 - 0.12 recognized in statement of P&L for the year ended 31st March 2020
As at 31/03/2019 ` in Crores Particulars Land Buildings Plant and Tanks & Furnitures Office Railway Vehicles Equipments Pipelines and Equipment Sidings Fixtures Gross Carrying 27.07 157.07 110.09 328.33 6.78 6.30 62.87 0.01 Amount Accumulated - 23.86 32.76 72.00 4.80 2.62 21.95 - depreciation Depreciation - 6.34 8.28 14.15 0.56 0.83 5.53 - recognized in statement of P&L for the year ended 31st March 2019 b) Income earned from Operating Leases recognized in Statement of Profit and Loss during FY 2019-20 is ` 54.03 Crores (of which variable lease payments that do not depend on index or rate is ` 8.33 Crores) i. Maturity Analysis of Lease payments receivable The maturity analysis of lease payments receivable under operating leases from the year ending 31st March 2020 is as follows:
` in Crores As at Within 1 1 - 2 2 - 3 3 - 4 4 - 5 More than Total 31/03/2020 year years years years years 5 years Undiscounted Lease 27.22 26.71 26.26 26.27 26.28 8.50 141.25 payments receivable
236 Bharat Petroleum Corporation Limited Note 50 Employee benefits [A] Post Employment Benefit Plans: Defined Contribution Scheme Defined Contribution Scheme (DCS) was introduced effective from 1st Jan 2007. Corporation contributes at a defined percentage of the employee salary out of the total entitlements on account of superannuation benefits under this scheme. This Fund is maintained under a trust. Corporation introduced GOI managed PFRDA NPS for its employees during the current financial year and is now contributing upto 10% of the salary from the above defined percentage to the NPS for the staff who have enrolled under the scheme. The remaining contribution continues to be made under DCS of which the Fund is maintained under a trust.
` in Crores Amount recognized in the Statement of Profit and Loss 2019-20 2018-19 Defined Contribution Scheme 132.82 102.62 Defined Benefit Plans The Corporation has the following Defined Benefit Plans: Gratuity The Corporation has a defined benefit gratuity plan managed by a trust. Trustees administer the contributions made to the trust, investments thereof etc. Based on actuarial valuation, the contribution is paid to the trust which is invested in plan assets as per the investment pattern prescribed by the Government. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service, on superannuation, resignation, termination or to his nominee on death. During 2018-19, gratuity non-funded pertaining to erstwhile PCCKL, has been merged with gratuity funded scheme of the Corporation pursuant to merger of PCCKL with the Corporation. Other Defined Benefits include (a) Post Retirement Medical Scheme (managed by a trust) to employees, spouse, dependent children and dependent parents; (b) Pension / Ex-Gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent Disablement benefit given to the spouse of the employee / employee, provided the deceased’s family / disabled employee deposits with the Corporation, retirement dues such as Provident Fund, Gratuity, Leave Encashment etc., payable to them; (d) Resettlement allowance paid to employees to permanently settle down at the time of retirement; (e) Felicitation benefits to retired employees on reaching the age related milestones; and (f) The Corporation makes contribution towards Provident Fund, which is administered by the trustees. The Corporation has an obligation to fund any shortfall on the yield of the trust’s investments over the interest rates declared by the Government under EPF scheme. These defined benefit plans expose the Corporation to actuarial risks, such as longetivity risk, interest rate risk, and market (investment) risk.
Annual Report 2019-20 237 Note 50 Employee benefits (CONTD.) Movement in net defined benefit (asset)/ liability
a) Reconciliation of balances of Defined Benefit Obligations. ` in Crores Particulars Gratuity - Funded Post Retirement Medical - Burmah Shell Funded Pension - Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 Defined Obligations at the 1,080.21 1,042.90 1,243.73 1,037.03 71.78 77.43 beginning of the year Interest Cost 83.82 82.18 96.76 80.47 5.18 5.95 Current Service Cost 14.47 14.53 41.55 37.23 - - Past Service Cost ------Benefits paid (168.77) (114.21) (49.03) (47.40) (14.96) (15.39) Actuarial (Gains)/ Losses on obligations -Changes in Financial 53.49 6.91 193.23 (3.41) 1.77 1.09 assumptions -Experience adjustments 8.68 47.90 (23.58) 139.81 8.37 2.70 Defined Obligations at the 1,071.90 1,080.21 1,502.66 1,243.73 72.14 71.78 end of the year b) Reconciliation of balances of Fair Value of Plan Assets in respect of Gratuity / Post Retirement Medical Fund Fair Value at the beginning 741.64 638.92 1,129.93 1,065.12 of the year Interest income (i) 57.55 50.35 87.91 82.65 Return on Plan Assets, 1.23 1.67 (12.57) 2.55 excluding interest income(ii) Actual Return on Plan 58.78 52.02 75.34 85.20 assets (i+ii) Contribution by employer 7.37 50.70 535.43 - Contribution by employee - - 1.35 1.41 Benefits paid - - (49.03) (21.80) Fair Value of Plan Assets 807.79 741.64 1,693.02 1,129.93 at the end of the year c) Amount recognized in 264.11 338.57 (190.36) 113.80 72.14 71.78 Balance sheet (a-b) d) Amount recognized in Statement of Profit and Loss Current Service Cost 14.47 14.53 41.55 37.23 - - Past Service Cost ------Interest Cost 83.82 82.18 96.76 80.47 5.18 5.95 Interest income (57.55) (50.35) (87.91) (82.65) - - Contribution by employee - - (1.35) (1.41) - - Expenses for the year 40.74 46.36 49.05 33.64 5.18 5.95 Note: Provision in respect of pay revision dues as mentioned in Note No. 47 is over and above the amounts recognized herein.
238 Bharat Petroleum Corporation Limited Note 50 Employee benefits (CONTD.) ` in Crores Particulars Gratuity - Funded Post Retirement Medical - Burmah Shell Funded Pension - Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 e) Amount recognized in Other Comprehensive Income Remeasurements Actuarial (Gains)/ Losses - Changes in Financial 53.49 6.91 193.23 (3.41) 1.77 1.09 assumptions - Experience adjustments 8.68 47.90 (23.58) 139.81 8.37 2.70 Return on plan assets (1.23) (1.67) 12.57 (2.55) - - excluding net interest cost Total 60.94 53.14 182.22 133.85 10.14 3.79 f) Major Actuarial Assumptions Discount Rate (%) 6.87 7.76 6.81 7.78 6.43 7.22 Salary Escalation/ Inflation 8.00 8.00 NA NA NA NA (%) Expected Return on Plan 6.87 7.76 6.81 7.78 NA NA assets (%) The estimates for future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors. The expected return on plan assets is based on market expectation at the beginning of the period, for returns over the entire life of the related obligations. Mortality rate is considered by our Actuary as per IALM 2006-08 table for the purpose of actuarial assumptions. g) Investment pattern for Fund Particulars Gratuity - Funded Post Retirement Medical - Funded As at As at As at As at 31/03/2020 31/03/2019 31/03/2020 31/03/2019 Category of Asset % % % % Government of India Securities 17.23 18.75 15.38 2.79 Corporate Bonds 7.00 4.45 57.47 77.71 Insurer Managed funds 74.31 68.64 - 4.53 State Government Securities 0.56 0.92 14.62 10.04 Others 0.90 7.24 12.53 4.93 Total (%) 100.00 100.00 100.00 100.00 For the funded plans, the trust maintains appropriate fund balance considering the analysis of maturities. Projected Unit credit method is adopted for Asset-Liability Matching. During this financial year, the Board has decided to contribute an estimated amount of ` 122 Crores towards advance funding to PRMB fund against the future service liabilities of the employees to protect the PRMB fund sustainability for the subsequent period in view of proposed disinvestment. Accordingly company has contributed such advance funding and the impact of the same as on 31st March 2020 is shown as surplus in asset/liabilities movements of PRMB Fund. During this financial year, in respect of investments made by PRMB Trust, an impairment provision of ` 35 Crores were made in PRMB trust accounts and accordingly the assets/liabilities of the PRMB trust has been estimated.
Annual Report 2019-20 239 Note 50 Employee benefits (CONTD.) Movement in net defined benefit (asset)/ liability ` in Crores Particulars Death / Permanent Re-settlement Ex-gratia Felicitation disablement - Allowance - Scheme - Scheme - Non Funded Non Funded Non Funded Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 a) Reconciliation of balances of Defined Benefit Obligations Defined Obligations at 11.26 11.51 12.87 13.29 341.88 325.79 84.45 - the beginning of the year Interest Cost 0.80 0.86 1.00 1.05 26.60 25.28 6.57 - Current Service Cost - - 3.00 2.89 5.66 4.05 2.37 0.72 Past Service cost ------83.73 Benefits paid (7.49) (13.24) (1.73) (2.42) (27.97) (24.43) (10.18) - Actuarial (Gains)/ Losses on obligations - Changes in Financial 2.12 1.12 0.67 0.09 28.82 (0.55) 6.62 - assumptions - Experience 5.65 11.01 (3.06) (2.03) 0.48 11.74 (10.13) - adjustments Defined Obligations at the 12.34 11.26 12.75 12.87 375.47 341.88 79.70 84.45 end of the year b) Amount recognized in 12.34 11.26 12.75 12.87 375.47 341.88 79.70 84.45 Balance sheet c) Amount recognized in Statement of Profit and Loss Current Service Cost - - 3.00 2.89 5.66 4.05 2.37 0.72 Past Service Cost ------83.73 Interest Cost 0.80 0.86 1.00 1.05 26.60 25.28 6.57 - Expenses for the year 0.80 0.86 4.00 3.94 32.26 29.33 8.94 84.45 d) Amount recognized in Other Comprehensive Income Remeasurements Actuarial (Gains)/ Losses - Changes in Financial 2.12 1.12 0.67 0.09 28.82 (0.55) 6.62 - assumptions - Experience 5.65 11.01 (3.06) (2.03) 0.48 11.74 (10.13) - adjustments Total 7.77 12.13 (2.39) (1.94) 29.30 11.19 (3.51) - e) Major Actuarial Assumptions Discount Rate (%) 6.24 7.07 6.87 7.76 6.81 7.78 6.81 7.78 The estimates for future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors. Mortality rate is considered by our Actuary as per IALM 2006-08 table for the purpose of actuarial assumptions.
240 Bharat Petroleum Corporation Limited Note 50 Employee benefits (CONTD.) Sensitivity analysis Sensitivity analysis for significant actuarial assumptions, showing how the defined benefit obligation would be affected, considering increase/decrease of 1% as at 31st March 2020 is as below:
` in Crores Particulars Gratuity - Post Burmah Death/ Resettlement Exgratia Felicitation Funded Retirement shell Permanent allowance- scheme- Scheme - Medical - Pension- Disablement- Non funded Non funded Non Funded Funded Non Non funded Funded + 1% change (59.66) (198.51) (2.22) (2.53) (0.74) (29.64) (6.81) in rate of Discounting - 1% change 68.76 256.52 2.38 2.72 0.85 34.73 8.20 in rate of Discounting + 1% 11.11 ------change in rate of Salary increase/ inflation - 1% change in (12.83) ------rate of Salary increase/ inflation Sensitivity analysis for significant actuarial assumptions, showing how the defined benefit obligation would be affected, considering increase/decrease of 1% as at 31st March 2019 is as below:
` in Crores Particulars Gratuity - Post Burmah Death/ Resettlement Exgratia Felicitation Funded Retirement shell Permanent allowance- scheme- Scheme - Medical - Pension- Disablement- Non funded Non funded Non Funded Funded Non Funded Non funded + 1% change (54.47) (151.95) (2.25) (2.57) (0.70) (25.70) (6.64) in rate of Discounting - 1% change 62.08 192.58 2.30 2.76 0.79 29.93 8.03 in rate of Discounting + 1% 10.84 ------change in rate of Salary increase/ inflation - 1% change (12.48) ------in rate of Salary increase/ inflation
Annual Report 2019-20 241 Note 50 Employee benefits (CONTD.) Sensitivity for significant actuarial asssumptions is computed by varying one actuarial assumption used for the valuation keeping all other actuarial assumptions constant. The expected future cash flows as at 31st March 2020 are as follows:
` in Crores Gratuity - Post Burmah shell Death/ Resettlement Exgratia Felicitation Funded Retirement Pension- Permanent allowance- scheme- Non Scheme - Expected contribution Medical - Non Funded Disablement- Non funded funded Non funded Funded Non funded Projected benefits payable in future years from the date of reporting 1st following year 167.48 56.77 14.75 5.47 1.66 26.24 9.93 2nd following year 89.60 66.60 10.83 2.52 0.88 26.32 2.77 3rd following year 133.98 72.31 9.17 2.11 1.61 25.16 3.27 4th following year 134.43 78.39 7.69 1.73 1.67 24.03 3.16 5th following year 121.38 84.30 6.39 1.38 1.54 22.93 4.08 Years 6 to 10 417.17 522.52 17.83 4.00 5.32 99.10 24.95
Other details as at 31st March 2020 Gratuity - Post Burmah shell Death/ Resettlement Exgratia Felicitation Funded Retirement Pension- Permanent allowance- scheme- Non Scheme - Particulars Medical - Non Funded Disablement- Non funded funded Non funded Funded Non funded Weighted average 8 16 4 6 8 10 10 duration of the Projected Benefit Obligation(in years) Prescribed 134.64 ------contribution for next year (` in Crores) [B] Provident Fund: The Corporation’s contribution to the Provident Fund is remitted to separate trust established for this purpose based on a fixed percentage of the eligible employees salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss. The actual return earned by the fund has mostly been higher than the Government specified minimum rate of return in the past years except for current year. The estimated interest short fall for the year 2019-20 is ` 8.00 Crores. After necessary provision for interest shortfall and provisions on certain investments made in corporate bonds of PF trust, necessary employer obligation of ` 132.01 Crores has been recognized and debited to Statement of Profit and Loss. The Fund balance is sufficient to meet the fund obligations as on 31st March 2020 and 31st March 2019. The details of fund obligations are given below:
` in Crores As at As at Particulars 31/03/2020 31/03/2019 Present value of benefit obligation at period end 5,584.69 5,260.14
242 Bharat Petroleum Corporation Limited Note 51 Related party transactions a) Names of the Related parties Joint Venture & Associate Companies 1. Indraprastha Gas Limited 2. Petronet India Limited * 3. Petronet CI Limited* 4. Petronet LNG Limited 5. Bharat Oman Refineries Limited 6. Maharashtra Natural Gas Limited 7. Central UP Gas Limited 8. Sabarmati Gas Limited 9. Bharat Stars Services Private Limited (Including Bharat Stars Services (Delhi) Pvt. Limited) 10. Bharat Renewable Energy Limited * 11. Matrix Bharat Pte. Ltd. 12. Delhi Aviation Fuel Facility Private Limited 13. Kannur International Airport Limited 14. GSPL India Gasnet Limited 15. GSPL India Transco Limited 16. Mumbai Aviation Fuel Farm Facility Private Limited 17. Kochi Salem Pipeline Private Limited 18. Petroleum India International# 19. BPCL-KIAL Fuel Farm Private Limited 20. Haridwar Natural Gas Pvt. Ltd. 21. Goa Natural Gas Pvt. Ltd. 22. FINO Paytech Limited (including Fino Payments Bank) 23. Ratnagiri Refinery & Petrochemicals Ltd. 24. Ujjwala Plus Foundation (Section 8 company) 25. IBV (Brasil) Petroleo Ltda. 26. Taas India Pte. Ltd. 27. Vankor India Pte. Ltd. 28. Falcon Oil & Gas BV 29. Mozambique LNG 1 Pte Ltd. 30. Mozambique LNG 1 Holding Company Ltd. 31. Mozambique LNG 1 Financing Company Ltd. 32. LLC TYNGD 33. JSC Vankorneft 34. Urja Bharat Pte. Ltd. 35. DNP Limited 36. Brahmaputra Cracker and Polymer Limited 37. Assam Bio Refinery (P) Ltd. 38. Indradhanush Gas Grid Limited 39. IHB Private Limited *Companies in the process of winding up # Dissolved during the year
Annual Report 2019-20 243 Note 51 Related party transactions (CONTD.) Key Management Personnel : Shri D. Rajkumar, Chairman & Managing Director Shri S. Ramesh, Director (Marketing) (Upto 24.09.2018) Shri A.K. Singh, Director (Marketing) (w.e.f. 01.10.2018) Shri R. Ramachandran, Director (Refineries) Shri K. Padmakar, Director (Human Resources) Shri K. Sivakumar, Director (Finance) (Upto 08.05.2018) Shri N. Vijayagopal, Director (Finance) (w.e.f. 17.12.2018) Shri M. Venugopal, (Company Secretary) (Upto 31.12.2019) Smt. V. Kala, Company Secretary, (w.e.f. 13.02.2020) Shri Rajesh Kumar Mangal, Independent Director (Upto 30.11.2019) Shri Deepak Bhojwani, Independent Director (Upto 01.12.2018) Shri Gopal Chandra Nanda, Independent Director (Upto 01.12.2018) Shri Vishal V Sharma, Independent Director (Upto 08.02.2020) Dr. K. Ellangovan, Govt. Nominee Director Smt. Jane Mary Shanti Sundharam, Independent Director (Upto 04.03.2020) Shri Vinay Sheel Oberoi, Independent Director (Upto 10.04.2020) Dr. (Smt.) Tamilisai Soundararajan, Independent Director (Upto 23.03.2019) Shri Harshad P. Shah, Independent Director (w.e.f. 16.07.2019) Shri Rajiv Bansal, Govt. Nominee Director (Upto 07.01.2020) Shri Rajesh Aggarwal, Govt. Nominee Director (w.e.f. 08.01.2020)
b) The nature wise transactions with the above Joint Ventures and Associates are as follows: ` in Crores S. Nature of Transactions 2019-20 2018-19 No. 1. Purchase of goods 50,420.13 40,057.44 2. Sale of goods 3,549.87 2,284.92 3. Purchase of fixed assets - 0.09 4. Rendering of Services 134.82 102.30 5. Receiving of Services 425.44 358.27 6. Interest Income / Share of profit/(loss) 114.38 115.73 7. Dividend Income and other receipts 243.13 234.91 8. Investment and Advance for Investments- Equity 190.21 44.01 9. Management Contracts 35.98 32.35 (Employees on deputation/ consultancy services) 10. Lease Rental & other charges received 30.74 30.96 11. Lease Rental & other Charges paid 0.10 0.10 12. Refund of Capital Contribution 0.10 - 13. Deposit given 0.06 0.04 14. Deposit refund received - 0.02 15. Reduction in Financial Guarantee - 1,046.88 16. Receivables as at year end 1,543.68 1,807.93 17. Payables as at year end 1,655.39 2,228.48 18. Commitments - 137.65 19. Guarantee Outstanding 1,385.24 1,333.03 The outstanding balances are unsecured and are being settled in cash except advance against equities which are settled in equity.
244 Bharat Petroleum Corporation Limited Note 51 Related party transactions (CONTD.) c) In the ordinary course of its business, the Corporation enters into transactions with other Government-controlled entities (not included in the list above). The Corporation has transactions with other Government-controlled entities, including but not limited to the following: • Sales and purchases of goods and ancillary materials; • Rendering and receiving of services; • Receipt of dividends; • Loans and advances; • Depositing and borrowing money; • Guarantees; and • Uses of public utilities. These transactions are conducted in the ordinary course of business on terms comparable to those with other entities that are not Government-controlled entities. d) Key management personnel compensation ` in Crores Particulars 2019-20 2018-19 Short-term employee benefits 3.54 5.64 Post-employment benefits 0.63 0.36 Other long-term benefits 0.31 - Others (including sitting fees to non-executive directors) 0.49 0.99 Note 52 Dues from Directors / Officers Dues from Directors is ` 0.34 Crores (31st March 2019: ` 0.41 Crores) and Dues from Officers is ` 4.62 Crores (31st March 2019: ` 4.32 Crores) Note 53 In compliance with Ind AS – 27 ‘Separate Financial Statements’, the required information is as under:
Principal place Percentage of ownership of Business Interest / Country of As at As at Subsidiaries Incorporation 31/03/2020 31/03/2019 Numaligarh Refinery Limited India 61.65% 61.65% Bharat Gas Resources Limited India 100.00% 100.00% Bharat PetroResources Limited India 100.00% 100.00% Joint Ventures and associates Indraprastha Gas Limited India 22.50% 22.50% Petronet India Limited # India 16.00% 16.00% Petronet CI Limited # India 11.00% 11.00% Petronet LNG Limited India 12.50% 12.50% Bharat Oman Refineries Limited* India 63.38% 50.00% Central UP Gas Limited India 25.00% 25.00% Maharashtra Natural Gas Limited India 22.50% 22.50% Sabarmati Gas Limited India 49.94% 49.94% Bharat Stars Services Private Limited India 50.00% 50.00% Bharat Renewable Energy Limited # India 33.33% 33.33% Matrix Bharat Pte. Ltd. Singapore 50.00% 50.00%
Annual Report 2019-20 245 Note 53 (CONTD.)
Principal place Percentage of ownership of Business Interest / Country of As at As at Subsidiaries Incorporation 31/03/2020 31/03/2019 Delhi Aviation Fuel Facility Pvt. Limited India 37.00% 37.00% Kannur International Airport Limited India 16.20% 18.68% @ GSPL India Gasnet Limited India 11.00% 11.00% GSPL India Transco Limited India 11.00% 11.00% Mumbai Aviation Fuel Farm Facility Private Limited India 25.00% 25.00% Kochi Salem Pipeline Private Limited India 50.00% 50.00% BPCL-KIAL Fuel Farm Private Limited India 74.00% 74.00% Haridwar Natural Gas Pvt. Ltd. India 50.00% 50.00% Goa Natural Gas Pvt. Ltd. India 50.00% 50.00% FINO Paytech Limited India 20.73% 20.73% Petroleum India International** India - 18.18% Ratnagiri Refinery & Petrochemicals Ltd. India 25.00% 25.00% IHB Private Limited India 25.00% - # Companies in the process of winding up @ Excluding calls received for the rights issue, for which subscription of shares were pending. * In addition to the ownership interest as mentioned above, the Corporation has made an investment in Compulsorily Convertible Debentures and Share Warrants of BORL. Change in equity ownership interest is due to conversion of warrants into equity shares. **During the year, Petroleum India International has been dissolved. Note: Ujjwala Plus Foundation is a joint venture of IOCL, BPCL and HPCL with fund contribution in the ratio of 50:25:25 which was incorporated as a limited by guarantee company (without share capital) under section 8 of Companies Act, 2013. Note 54 Earnings Per Share (EPS) ` in Crores Particulars 2019-20 2018-19 i. Profit attributable to equity holders of the Corporation for basic and 2,683.19 7,132.02 diluted earnings per equity share
ii. Weighted average number of ordinary shares Issued ordinary shares as at 1st April (In Crores) 216.93 216.93 Less : Investment held by BPCL Trust for Investment in Shares [Refer (20.24) (20.24) Note No. 45] (In Crores) Weighted average number of shares as at period end for basic and 196.69 196.69 diluted EPS (In Crores)
Basic and Diluted EPS (`) 13.64 36.26
246 Bharat Petroleum Corporation Limited Note 55 The Corporation has elected to continue the policy adopted under Previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of 31st March 2016 i.e. foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any, accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of the liability. The net amount remaining unamortized under Foreign Currency Monetary Item Translation Difference Account as at 31 March 2020 is Nil (net loss as at 31 March 2019 ` 29.34 Crores). Note 56 Impairment of Assets The Corporation assesses, at each reporting date, whether there is an indication of impairment of assets. Further, it is assumed that suitable mechanism would be in place by the Government of India, in line with earlier/ current year(s), to provide compensation towards under recoveries of margin, if any, and recoveries against Direct Benefit Transfer for LPG Scheme on account of sale of sensitive petroleum products in subsequent years. Based on the assessment, there is no indication of impairment of assets as at 31st March 2020. Note 57 ProvisionS In compliance of Ind AS 37 on “Provisions, Contingent Liabilities and Contingent Assets”, the required information is as under: ` in Crores Opening Additions during Utilisation Reversals Closing Nature balance the year during the year during the year balance Excise 1.88 74.28 74.25 1.33 0.58 Customs 3.24 - - - 3.24 Service Tax - 1.83 1.83 - - Income Tax (TDS) - 4.20 - - 4.20 VAT/ Sales Tax/ Entry Tax 399.29 14.52 - 81.43 332.38 Property Tax 37.29 18.95 8.72 0.83 46.69 Total 441.70 113.78 84.80 83.59 387.09 Previous year 426.61 35.70 13.40 7.21 441.70 The above provisions are made based on estimates and the expected timing of outflows is not ascertainable at this stage. Above includes provision of ` 107.00 Crores (Previous year ` 123.66 Crores) for which deposits have been made. Note 58 Disclosure in respect of Expenditure on Corporate Social Responsibility Activities ` in Crores Particulars 2019-20 2018-19 a) Unspent CSR Expenditure carried forward from previous year (Opening 172.25 146.88 Provision) b) Amount required to be spent by the company during the year. 198.98 203.32 c) Amount spent during the year (on purpose other than construction / 345.57* 177.95* acquisition of assets controlled by the company) # d) Provision created for balance amount (Closing Provision) (a+b-c) 25.66 172.25 # The above expenditure includes contribution to funds, expenses through registered trusts / registered society or company established under section 8 of the Act and direct expenses by the company. * including payables of ` 35.68 Crores (Previous year ` 18.06 Crores)
Annual Report 2019-20 247 ------5.48 31.76 18.79 10.35 88.62 287.85 326.26 421.04 2,363.59 1,224.45 5,208.54 1,524.99 1,094.02 Total 10,833.59 ` in Crores ------66.62 Level 3 ------Fair value 5.48 31.76 18.79 10.35 88.62 326.26 421.04 1,224.45 1,524.99 1,094.02 Level 2 ------221.23 2,363.59 5,208.54 10,833.59 Level 1 8.30 5.48 53.99 31.76 18.79 17.51 98.27 36.55 10.35 74.83 500.00 590.58 287.85 262.40 421.04 5,943.29 8,864.19 2,299.48 1,187.31 6,795.41 5,164.34 5,208.55 2,300.00 1,254.10 1,094.02 Total 79,030.08 18,629.07 12,509.54 17,721.37 11,271.29 23,629.58 - - - - 8.30 0.01 53.99 31.76 17.51 98.27 36.55 74.83 500.00 590.58 262.40 421.04 5,943.29 8,864.19 2,299.48 1,187.31 6,795.41 5,164.34 2,300.00 1,254.10 1,094.02 79,011.29 18,629.07 12,509.54 17,721.37 11,271.29 18,117.36 Amortized Cost ------287.85 287.85 Carrying amount such FVOCI - designated as ------5.48 18.79 18.79 10.35 5,224.37 5,208.54 FVTPL Mandatorily at 9 8 9 9 9 9 9 9 32 31 30 26 25 25 32 25 19 10 15 17 16 19 19 18 Note 8 & 14 25 & 32 25 & 32 25 & 32 25 & 32 Reference Accounting classification and fair values The following table shows the carrying amounts and fair values of financial assets liabilities, including their in levels the fair value hierarchy. It does not include fair value information for financial assets and liabilities not measured at fair if the carrying amount is a reasonable approximation of value. Total Note: There are no other categories of financial instruments than those mentioned above. Other Current liabilities Trade and Other Payables Short term borrowings Other Non-Current financial liabilities Lease Obligation Foreign Currency Loans - Syndicated Interest Free Loan from Govt. of Kerala Term loans Debentures OIDB Loans Total Financial liabilities Derivative Liability on Interest Rate Swaps Bonds -Current Others -Non-current Trade receivables Bank Balances other than Cash and cash equivalents Other Deposits Cash and cash equivalents Financial assets Investment in equity instruments Investment in debt instruments Derivative instruments - Commodity contracts Derivative instruments- Forward contracts Deposits Loan to subsidiary- fixed rate Loan to subsidiary- variable rate Loan to Joint Venture Loans Non-current-Loans to employee Non-current- Others Current As at 31/03/2020
N ote 59 F inancial instruments A.
248 Bharat Petroleum Corporation Limited ------1.11 1.96 0.51 29.27 21.25 35.22 391.32 179.36 280.66 610.12 2,311.82 1,371.19 1,378.00 5,075.89 Total 11,991.09 ` in Crores ------114.30 Level 3 ------Fair value 1.11 1.96 0.51 29.27 21.25 35.22 391.32 179.36 280.66 1,371.19 1,378.00 Level 2 ------495.82 2,311.82 5,075.89 11,991.09 Level 1 1.11 1.96 0.51 29.27 56.48 54.32 97.21 78.49 16.92 21.96 21.25 30.22 391.32 179.36 238.49 450.00 610.12 2,000.00 8,108.55 3,580.75 2,299.32 1,358.50 1,628.88 6,670.72 9,409.61 1,254.10 5,075.90 Total 17,687.54 17,055.67 11,722.91 64,079.46 26,051.98 - - - - 0.01 29.27 56.48 54.32 97.21 78.49 16.92 21.96 30.22 391.32 238.49 450.00 2,000.00 8,108.55 3,580.75 2,299.32 1,358.50 1,628.88 6,670.72 9,409.61 1,254.10 Cost 17,687.54 17,055.67 11,722.91 63,898.99 20,342.25 Amortized ------610.12 610.12 Carrying amount such FVOCI - designated as ------1.11 1.96 0.51 21.25 179.36 180.47 5,075.89 5,099.61 FVTPL Mandatorily at 9 9 9 9 9 9 9 8 25 25 25 26 30 31 32 25 18 16 17 15 10 19 32 32 19 19 19 Note 8 & 14 25 & 32 25 & 32 Reference Term loans Term loans Foreign Currency Loans - Syndicated Other Non-Current financial liabilities Short term borrowings Trade and Other Payables Other Current liabilities Note: There are no other categories of financial instruments than those mentioned above. Debentures OIDB Loans Loans - Non-current- Loans to employee - Non-current- Others - Current Other Deposits Cash and cash equivalents Bank Balances other than Cash and cash equivalents Trade receivables Others - Non-current - Current Total Financial liabilities Derivative Liability on forwards Derivative Liability on Currency Swaps Bonds Derivative instruments - Commodity contracts Derivative instruments - Interest rate swap Derivative instruments - Forward contracts Deposits Loan to subsidiary- fixed rate Loan to subsidiary- variable rate Loan to Joint Venture Financial assets Investment in equity instruments Investment in debt instruments As at 31/03/2019 N ote 59 F inancial instruments (CONTD.)
Annual Report 2019-20 249 Note 59 Financial instruments (Contd.) B. Measurement of fair values Valuation techniques and significant unobservable inputs The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, for financial instruments measured at fair value in the Balance Sheet, as well as the significant unobservable inputs used. Financial instruments measured at fair value
Type Valuation technique Significant Inter-relationship unobservable between inputs significant unobservable inputs and fair value measurement Unquoted equity The Valuation is based on market multiples derived Adjusted The estimated shares (Cochin from quoted prices of companies comparable to market fair value would International Airport investee and the expected revenue and PAT of the multiple (P/E) increase/ Limited) investee. (decrease) if Adjusted market multiple were higher/(lower) Derivative Forward pricing: The fair value is determined using Not applicable Not applicable instruments - quoted forward exchange rates at the reporting date. forward exchange contracts Derivative Discounted cash flows: The valuation model Not applicable Not applicable instruments - considers the present value of expected receipt/ interest rate swap payment discounted using appropriate discounting and currency swap rates. This technique also involves using the interest rate curve for projecting the future cash flows. Derivative Fair valuation of Commodity Derivative instruments Not applicable Not applicable instruments are based on forward assessment done by Platts - commodity which is an independent agency which assesses contracts benchmark global crude oil and product prices. Globally counterparties also use Platts assessment for settlement of transactions. Non current financial Discounted cash flows: The valuation model Not applicable Not applicable assets and liabilities considers the present value of expected receipt/ measured at payment discounted using appropriate discounting amortized cost rates.
250 Bharat Petroleum Corporation Limited Note 59 Financial instruments (Contd.) Level 3 fair values Reconciliation of Level 3 fair values The following table shows a reconciliation of the opening and closing balances for Level 3 fair values.
` in Crores Equity Particulars securities Opening Balance(1st April 2018) 105.26 Net change in fair value (unrealized) 9.04 Closing Balance (31st March 2019) 114.30
Opening Balance(1st April 2019) 114.30 Net change in fair value (unrealized) (47.68) Closing Balance (31st March 2020) 66.62
Sensitivity analysis For the fair values of unquoted equity shares, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects: ` in Crores Significant unobservable inputs As at 31/03/2020 As at 31/03/2019 Profit or loss Profit or loss Increase Decrease Increase Decrease P/E (5% movement) 3.33 (3.33) 5.71 (5.71) C. Financial risk management C. i. Risk management framework The Corporation’s Board of Directors has overall responsibility for the establishment and oversight of the Corporation’s risk management framework. The Risk Management Committee of the Board has defined roles and responsibilities, which includes reviewing and recommending the risk management plan and the risk management report for approval of the Board with the recommendation of the Audit Committee. The Corporation has adopted a Risk Management Charter and Policy for self-regulatory processes and procedures for ensuring the conduct of the business in a risk conscious manner. The Corporation has exposure to the following risks arising from financial instruments: • Credit risk ; • Liquidity risk ; and • Market risk C. ii. Credit risk Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Corporation’s trade and other receivables, cash and cash equivalents and other bank balances, derivatives and debt securities. The maximum exposure to credit risk in case of all the financial instuments covered below is restricted to their respective carrying amount. (a) Trade and other receivables from customers Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Corporation grants credit terms in the normal course of business.
Annual Report 2019-20 251 Note 59 Financial instruments (Contd.) As at 31st March 2020 and 31st March 2019, the Corporation’s retail dealers, industrial and aviation customers accounted for the majority of the trade receivables. Expected credit loss assessment for Trade and other receivables from customers as at 31st March 2020 and 31st March 2019 The Corporation uses an allowance matrix to measure the expected credit losses of trade and other receivables. The loss rates are computed using a ‘roll rate’ method based on the probability of receivable progressing through successive stages till full provision for the trade receivable is made. Roll rates are calculated separately for exposures based on common credit risk characteristics for a set of customers. The following table provides information about the exposure to credit risk and Expected Credit Loss Allowance for trade and other receivables: ` in Crores Gross carrying Weighted Loss As at 31/03/2020 amount average loss allowance rate - range Debts not due 2,702.73 0.31% 8.38 Debts over due 2,315.63 12.28% 284.47 Total 5,018.36 5.84% 292.85
` in Crores Gross carrying Weighted Loss As at 31/03/2019 amount average loss allowance rate - range Debts not due 4,197.20 0.19% 8.00 Debts over due 2,368.19 10.67% 252.77 Total 6,565.39 3.97% 260.77 The Corporation does not provide for any loss allowance on trade receivables where risk of default is negligible such as receivables from other oil marketing companies, if any, hence the same is excluded from above. Loss rates are based on actual credit loss experience over the past three years. The movement in the loss allowance in respect of trade and other receivables during the year was as follows.:- ` in Crores Balance as at 1st April, 2018 264.26 Movement during the year (3.49) Balance as at 31st March, 2019 260.77 Movement during the year 32.08 Balance as at 31st March, 2020 292.85 (b) Cash and cash equivalents and Other Bank Balances The Corporation held cash and cash equivalents and other bank balances of ` 115.78 Crores at 31st March 2020 (31st March 2019: ` 95.41 Crores). The cash and cash equivalents are held with banks with good credit ratings and financial institution counterparties with good market standing. Also, Corporation invests its short term surplus funds in bank fixed deposits, Tri Party Repo and liquid schemes of mutual funds, which carry no / low mark to market risks for short duration and therefore does not expose the Corporation to credit risk. (c) Derivatives The derivatives are entered into with banks, financial institutions and other counterparties with good credit ratings. Further exposures to counterparties are closely monitored and kept within the approved limits.
252 Bharat Petroleum Corporation Limited Note 59 Financial instruments (Contd.) (d) Investment in debt securities Investment in debt securities are mainly as loans to subsidiaries, joint venture companies and investment in government securities which do not carry any significant credit risk. C. iii. Liquidity risk Liquidity risk is the risk that the Corporation will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk is managed by Corporation through effective fund management. The Corporation has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Corporation has access to funds from debt markets through commercial paper programs, foreign currency borrowings and other debt instruments. The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments. Maturity Analysis of Significant Financial Liabilities ` in Crores Contractual cash flows As at 31/03/2020 Total Upto 1 year 1-3 years 3-5 years More than 5 years Non-derivative financial liabilities Bonds 12,989.93 490.01 8,353.70 301.54 3,844.68 OIDB Loans 1,352.22 478.76 655.06 218.40 - Term loans 742.63 76.22 136.91 429.50 100.00 Non Convertible Debentures 2,874.62 178.24 1,616.18 1,080.20 - Foreign Currency Loans - Syndicated 9,637.36 3,480.47 335.11 5,821.78 - Short term borrowings 17,721.37 17,721.37 - - - Trade and other payables 12,509.54 12,509.54 - - - Other current liabilities 18,629.07 18,629.07 - - - Financial guarantee contracts* 7,225.73 633.24 - 1,164.71 5,427.78 ` in Crores Contractual cash flows As at 31/03/2019 Total Upto 1 year 1-3 years 3-5 years More than 5 years Non-derivative financial liabilities Bonds 13,793.62 1,874.54 4,357.79 3,895.21 3,666.08 OIDB Loans 1,560.15 583.69 697.80 278.66 - Term loans 2,825.80 165.45 566.50 1,993.85 100.00 Non Convertible Debentures 3,052.98 178.39 906.51 1,968.08 - Foreign Currency Loans - Syndicated 10,886.19 253.17 3,220.62 7,412.40 - Short term borrowings 3,580.75 3,580.75 - - - Trade and other payables 17,687.54 17,687.54 - - - Other current liabilities 17,055.67 17,055.67 - - - Financial guarantee contracts* 6,630.07 - 581.04 1,068.70 4,980.33
Derivative financial liabilities Currency Swaps 214.97 214.97 - - - * Guarantees issued by the Corporation on behalf of joint venture/subsidiary are with respect to borrowings raised by the respective entity. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the subsidiary/joint venture have defaulted and hence, the Corporation does not have any present obligation to third parties in relation to such guarantees.
Annual Report 2019-20 253 Note 59 Financial instruments (Contd.) C.iv. Market risk Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises four types of risk: currency risk, interest rate risk, commodity risk and other price risk. C.iv.a Currency risk The Corporation is exposed to currency risk on account of its operating and financing activities. The functional currency of the Corporation is Indian Rupee. Our exposure is mainly denominated in U.S. dollars (USD). The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Corporation has put in place a Financial Risk Management Policy to identify the most effective and efficient ways of managing the currency risks. The Corporation uses derivative instruments, (mainly foreign exchange forward contracts) to mitigate the risk of changes in foreign currency exchange rates in line with our policy. The Corporation does not use derivative financial instruments for trading or speculative purposes. Exposure to currency risk The currency profile in INR of financial assets and financial liabilities as at 31st March 2020 and 31st March 2019 are as below: ` in Crores As at 31/03/2020 USD EURO JPY CHF Others Financial assets Cash and cash equivalents 40.30 - - - - Trade receivables and other assets 1,305.88 0.19 - - 0.02 Net exposure for assets 1,346.18 0.19 - - 0.02
Financial liabilities Bonds 11,271.29 - - - - Foreign Currency Loans - Syndicated 8,864.19 - - - - Short term borrowings 7,666.75 - - - - Trade Payables and other liabilities 7,625.32 171.32 26.79 0.08 4.75 Add/(Less): Foreign curency forward (503.25) - - - - exchange contracts Add/(Less): Foreign currency swaps - - - - - Net exposure for liabilities 34,924.30 171.32 26.79 0.08 4.75 Net exposure (Assets - Liabilities) (33,578.12) (171.13) (26.79) (0.08) (4.73)
` in Crores As at 31/03/2019 USD EURO JPY CHF Others Financial assets Cash and cash equivalents 11.81 - - - - Trade receivables and other assets 244.04 0.18 - - 0.01 Net exposure for assets 255.85 0.18 - - 0.01
Financial liabilities Bonds 10,332.38 - - 1,390.54 - Foreign Currency Loans - Syndicated 8,108.55 - - - - Short term borrowings 1,632.44 - - - - Trade Payables and other liabilities 10,370.28 203.55 12.81 12.44 2.88 Add/(Less): Foreign curency forward (1,743.12) - - - - exchange contracts Add/(Less): Foreign currency swaps 1,579.11 - - (1,390.54) - Net exposure for liabilities 30,279.64 203.55 12.81 12.44 2.88 Net exposure (Assets - Liabilities) (30,023.79) (203.37) (12.81) (12.44) (2.87)
254 Bharat Petroleum Corporation Limited Note 59 Financial instruments (Contd.) Sensitivity analysis A reasonably possible strengthening (weakening) of the USD against INR at 31st March would have affected the measurement of financial instruments denominated in US dollars and affected profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalized to Property, Plant and Equipment or recognized directly in reserves, the impact indicated below may affect the Corporation’s income statement over the remaining life of the related Property, Plant and Equipment or the remaining tenure of the borrowing respectively.
` in Crores Profit or loss Effect in INR (before tax) Strengthening Weakening For the year ended 31st March, 2020 3% movement USD (1,007.34) 1,007.34
` in Crores Profit or loss Effect in INR (before tax) Strengthening Weakening For the year ended 31st March, 2019 3% movement USD (900.71) 900.71 C.iv.b Interest rate risk Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company’s approach to managing interest rate risk is to have a judicious mix of borrowed funds with fixed and floating interest rate obligation. Exposure to interest rate risk Corporation’s interest rate risk arises primarily from borrowings. The interest rate profile of the Corporation’s interest- bearing financial instruments is as follows:
` in Crores Particulars Note As at As at Reference 31/03/2020 31/03/2019 Fixed-rate instruments Financial Assets - measured at amortized cost Investment in debt instruments 8 0.01 0.01 Loan to Subsidiary 9 262.40 238.49 Loan to Joint Venture 9 1,254.10 1,254.10 Financial Assets - measured at Fair Value through Profit & Loss Investment in debt instruments 14 5,208.54 5,075.89 Total of Fixed Rate Financial Assets 6,725.05 6,568.49 Financial liabilities - measured at amortized cost Bonds 25 11,271.29 11,722.91
Annual Report 2019-20 255 Note 59 Financial instruments (Contd.) ` in Crores Particulars Note As at As at Reference 31/03/2020 31/03/2019 OIDB Loans 25 & 32 1,187.31 1,358.50 Non- Convertible Debentures 25 2,299.48 2,299.32 Short term borrowings 30 10,054.63 1,737.19 Term Loan 25 31.76 29.27 Total of Fixed Rate Financial Liabilities 24,844.47 17,147.19 Variable-rate instruments Financial Assets - measured at amortized cost Loan to Subsidiary 9 2,300.00 450.00 Total of Variable Rate Financial Assets 2,300.00 450.00 Financial liabilities - measured at amortized cost Foreign Currency Loans - Syndicated* 25 & 32 8,864.19 8,108.55 Short term borrowings 30 7,666.75 1,843.56 Term loans 25 & 32 500.00 2,000.00 Total of Variable Rate Financial Liabilities 17,030.94 11,952.11 * In respect of Foreign Currency Loans, the Corporation has entered into Interest Rate Swaps of USD 75 Million Fair value sensitivity analysis for fixed-rate instruments The Corporation accounts for certain investments in fixed-rate financial assets such as investments in Oil bonds and Government Securities at fair value through profit or loss. Accordingly, a decrease in 25 basis point in interest rates is likely to increase the profit or loss (before tax) for the year ending 31st March 2020 by ` 54.48 Crores (31st March 2019 - ` 60.87 Crores) and an increase in 25 basis point in interest rates is likely to decrease the profit or loss (before tax) for the year ending 31st March 2020 by ` 55.19 Crores (31st March 2019 - ` 61.80 Crores). Cash flow sensitivity analysis for variable-rate instruments A reasonably possible change of 25 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. In cases where the related interest rate risk is capitalized to Property, Plant and Equipment, the impact indicated below may affect the Corporation’s income statement over the remaining life of the related Property, Plant and Equipment. ` in Crores Profit or (loss) Cash flow sensitivity (net) 0.25 % 0.25% Increase Decrease As at 31/03/2020 Variable-rate loan instruments (41.53) 41.53 Interest on Loan given to Subsidiary 5.75 (5.75) Cash flow sensitivity (net) (35.78) 35.78
As at 31/03/2019 Variable-rate loan instruments (29.49) 29.49 Interest on Loan given to Subsidiary 1.12 (1.12) Cash flow sensitivity (net) (28.37) 28.37 C.iv.c Commodity rate risk The Corporation’s profitability gets affected by the price differential (also known as Margin or Crack spread) between prices of products (output) and the price of the crude oil and other feed-stocks used in production (input). Prices of both are set by markets. Hence the Corporation uses derivatives instruments (swaps, futures, options, and forwards) to hedge exposures to commodity price risk to cover refinery operating cost using Basic Swaps on various products
256 Bharat Petroleum Corporation Limited Note 59 Financial instruments (Contd.) cracks like Naphtha, Gasoline (Petrol), Jet/Kerosene, Gasoil (Diesel) and Fuel Oil against Benchmark Dubai Crude. Further volatility in freight costs is hedged through Freight Forwards and bunker purchases. Settlement of all derivative transactions take place on the basis of monthly average of the daily prices of the settlement month quoted by Platts. The Corporation measures market risk exposure arising from its trading positions using value-at-risk techniques. These techniques make a statistical assessment of the market risk arising from possible future changes in market prices over a one-day holding period. The Corporation uses historical model of VAR techniques based on variance/covariance to make a statistical assessment of the market risk arising from possible future changes in market values over a 24-hour period and within a 95% confidence level. The calculation of the range of potential changes in fair value takes into account positions and the history of price movements for last two years. VAR calculation for open position as on 31st March 2020 is as given below: Brent Dt - HSFO - Regrade Gasoil - Gasoil - TD3C Product Dubai Dubai Naphtha Gasoline Unit USD/Bbl USD/Bbl USD/Bbl USD/Bbl USD/Bbl USD/MT Mean 0.78 (4.08) (1.06) 18.23 8.30 12.67 Standard Deviation 1.70 7.20 1.66 3.45 3.61 7.17 Max dev: 95% confidence 2.79 11.84 2.74 5.68 5.93 11.80 Mean +Max Dev:95% (2.01) 7.76 1.68 23.91 14.23 0.88 Avg.Trade Price 0.86 (5.95) (0.92) 14.20 12.90 13.52 Lots as on 31/03/2020 105.00 9.00 12.00 3.00 3.00 12.00 Standard Lot size 50000 BBL 50000 BBL 50000 BBL 50000 BBL 50000 BBL 5000 MT VAR USD million 15.08 6.17 1.56 1.46 0.20 7.59 Total Portfolio VAR in USD million (without considering inter- 32.06 commodity VAR correlation) C.iv.d Price risk The Corporation’s exposure to equity investments price risk arises from investments held by the Corporation and classified in the financial statements at fair value through OCI. The corporation intends to hold these investments for long-term for better returns and price risk will not be significant from a long term perspective. Exposure to price risk ` in Crores Profit or loss Other components of Equity Effect in INR (before tax) Strengthening Weakening Strengthening Weakening As at 31/03/2020 1% movement Investment in Oil India - FVOCI - - 2.21 (2.21) Investment in CIAL - FVOCI - - 0.67 (0.67) Total - - 2.88 (2.88)
` in Crores Profit or loss Other components of Equity Effect in INR (before tax) Strengthening Weakening Strengthening Weakening As at 31/03/2019 1% movement Investment in Oil India - FVOCI - - 4.96 (4.96) Investment in Cochin International Airport Ltd. - - 1.14 (1.14) - FVOCI Total - - 6.10 (6.10)
Annual Report 2019-20 257 - - - - - 16.99 4,075.89 2,580.75 4,208.56 16,721.39 ` in Crores Net Amount March 2020 and st - - - - 0.98 0.98 999.98 999.98 1,000.00 1,000.00 can be offset Amounts which - - - - 0.98 Related amounts not offset 17.97 5,075.89 3,580.75 5,208.54 17,721.37 Financial Instrument ------59.87 19.35 3,813.29 3,323.07 Net amounts balance sheet presented in the ------3,530.69 3,530.69 2,085.86 2,085.86 set off in the balance sheet Gross amounts ------3,590.56 7,343.98 2,105.21 5,408.93 Effect of offsetting on the balance sheet Gross amounts A A A A D D Note B & C B & C B & C B & C reference March 2019. st Particulars As at 31/03/2020 Financial assets Investment in GOI Bonds Trade and other receivables Financial liabilities Short term borrowings Trade and other payables As at 31/03/2019 Financial assets Investment in GOI Bonds Trade and other receivables Derivative Assets Financial liabilities Short term borrowings Trade and other payables Derivative Liabilities The column ‘net amount’ shows the impact on Corporation’s balance sheet if all set-off rights are exercised. 31 The following table presents the recognized as at 31 The following financial instruments and other similar agreements that are not offset, that are offset
N ote 59 F inancial instruments (C ontd .) D. Offsetting
258 Bharat Petroleum Corporation Limited Note 59 Financial instruments (Contd.) Notes A. The Corporation has Tri Party Repo limits from Clearing Corporation of India Limited, which are secured by Oil Marketing Companies GOI Special Bonds 2026 and Government Securities. As the Counterparty currently does not have a legally enforceable right to off set these amounts, these amounts have not been offset in the balance sheet, but have been presented separately in the table above. B. The Corporation purchases and sells petroleum products from different Oil Marketing Companies. Under the terms of the agreement, the amounts payable by the Corporation are offset against receivables and only the net amounts are settled. The relevant amounts have therefore been presented net in the balance sheet. C. The Corporation enters into derivative transactions under the International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. D. The Corporation enters into derivative transactions under the International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. The ISDA master netting agreements do not meet the criteria for offsetting in the balance sheet. This is because the Counterparty does not currently have legally enforceable right to offset recognized amounts, because the right to offset is enforceable only on the occurrence of future events. Note 60 Capital Management The Corporation’s objective is to maximize the shareholders’ value by maintaining an optimum capital structure. Management monitors the return on capital as well as the debt equity ratio and makes necessary adjustments in the capital structure for the development of the business. The Corporation’s debt to equity ratio as at 31st March, 2020 was 1.26 (31st March 2019: 0.79). Note: For the purpose of computing debt to equity ratio, equity includes Equity Share Capital and Other Equity and Debt includes Long term borrowings, short term borrowings and current maturities of long term borrowings but excluding lease obligations. Note 61 Segment Reporting As per the requirements of Ind AS 108 on “Operating Segments”, segment information has been provided under the Notes to Consolidated Financial Statements. Note 62 To the extent, the Corporation has received intimation from the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, the details regarding Micro and Small enterprises are provided as under: ` in Crores Particulars As at As at 31/03/2020 31/03/2019 Principal amount overdue (remaining unpaid) as on 31st March - 0.57 Interest due thereon remaining unpaid as on 31st March - 0.01 Payment made during the year after the due date* Principal - - Interest - - Interest accrued and remaining unpaid as at 31st March 0.01 0.01 *Undisputed payments to Micro and Small enterprises during the year are made as per the MSMED Act, 2006.
Annual Report 2019-20 259 Note 63 Contingent Liabilities and Capital Commitments ` in Crores As at As at Particulars 31/03/2020 31/03/2019 (a) Contingent Liabilities : In respect of Income Tax matters 791.88 55.25 Other Matters : i) Claims against the Corporation not acknowledged as debts * : Excise and customs matters 221.20 1,080.83 Service Tax matters 6.68 41.92 Sales tax/VAT matters 3,362.13 10,394.76 Land Acquisition cases for higher compensation 126.97 126.93 Others 214.35 261.52 * These include ` 1241.94 Crores (31st March 2019: ` 7,656.66 Crores) against which the Corporation has a recourse for recovery and ` 95.51 Crores (31st March 2019: ` 96.99 Crores) which are on capital account. ii) Claims on account of wages, bonus / ex-gratia payments in respect 29.65 25.81 of pending court cases iii) Guarantees (Refer Note Below) 1,156.99 1,156.99
(b) Capital Commitments : i) Estimated amount of contracts remaining to be executed on capital 4,918.37 5,820.83 account and not provided for ii) Other Commitments # - 137.65 Note: Apart from the above; 1. The Corporation’s subsidiary, BGRL has been authorized by Petroleum and Natural Gas Regulatory Board (PNGRB) for development of 11 Geographical Areas (GAs) in Bid Round 9 and 2 GAs in Bid Round 10. As a promoter, BPCL has issued Parent Company Guarantees (PCGs) to PNGRB guaranteeing all performance obligations of BGRL under these 13 GAs. The outflow that may arise under these PCGs is not quantifiable. 2. The Corporation has issued a Parent Company Guarantee (PCG) in favor of Mozambique LNG1 Company Pte Limited in respect of obligations of BGRL under LNG Sales Purchase Agreement (SPA) with Mozambique LNG1 Company Pte Limited. Transaction under the SPA is expected to be intiated in FY 2023-24. The outflow that may arise under these PCGs is not quantifiable. 3. The Corporation’s subsidiary, BPRL, is engaged in the business of Exploration and Production (E&P) of oil & gas and has participating interest in several blocks held directly or through group companies. BPCL has issued performance guarantees/counter-indemnities/letter of undertakings in favour of Government/Government Agencies/Operators/other partners towards performance of obligations of BPRL (including its group companies) under the Concession Agreement/Joint Operating Agreements/Production Sharing Contracts/Licenses/ Farmout Agreements relating to various such E&P oil & gas blocks acquired by them. The outflow that may arise under these performance guarantees, is not quantifiable. 4. The Corporation has issued Performance Guarantee on behalf of Petronet LNG Limited against the performance obligations of LNG SPA, the outflow that may arise under the same is not quantifiable. # Calls received for Rights issue/Private placement during the year from JVs and Associates for which subscription of shares was pending.
260 Bharat Petroleum Corporation Limited Note 64 Research and Development Expenditure ` in Crores Particulars 2019-20 2018-19 a) Revenue Expenditure 50.71 53.41 b) Capital Expenditure 41.47 47.31 Note 65 Revenue from Contracts with Customers A. Contract balances ` in Crores As at As at 31/03/2020 31/03/2019 Contract liabilities 302.45 201.68 The contract liabilities primarily relates to the liability towards customer loyalty program for unutilized points and the upfront bidding fees/fixed fees pertaining to Retail Outlets
` in Crores Movement in contract liabilities is as follows 2019-20 2018-19 At beginning of the year 201.68 165.02 Increases due to cash received, excluding amounts recognized as revenue 160.46 84.53 during the year Revenue recognized that was included in the contract liability balance at the 59.69 47.87 beginning of the year At end of the year 302.45 201.68 Note 66 During the current year, we have received judgement from various appellate authorities. Further assessment proceedings for AY 2017-18 was completed. Accordingly net impact of ` 833.79 Crores being tax provision for earlier years in respect of above items no longer required has been reversed in “Short/(Excess) provision of earlier years”. Corporation has decided to opt for Vivad se Vishwas Scheme, 2020 in respect of all the eligible Income Tax disputes and additional tax provision for earlier years amounting to ` 219.96 Crores has been recognized in “Short/(Excess) provision of earlier years”. The settlement of these cases are yet to be completed as on 31st March 2020. Note 67 In pursuance to Section 115BAA of the Income Tax Act, 1961 announced by Government of India through Taxation Laws (Amendment) Ordinance, 2019, corporation has an irrevocable option of shifting to a lower tax rate and simultaneously forgo certain tax incentives including loss of the accumulated MAT Credit. The corporation has not exercised this option in the current period due to unutilized MAT Credit available in the books. Note 68 The Corporation has decided to transfer its Gas business into a separate wholly owned subsidiary named Bharat Gas Resources Limited. Accordingly, the carrying amount of the assets and liabilities as at 31st March 2020 and 31st March 2019 pertaining to the Gas business are presented separately from other Assets and Liabilities and included under Assets/ Liabilities included in Disposal Group in line with Ind AS 105.
Annual Report 2019-20 261 Note 69 Due to COVID-19 pandemic, there has been significant volatility and sharp reduction in the prices of Crude Oil and Petroleum Products, which has resulted in significant write-down of Inventories to Net Realizable Value (NRV). Accordingly Corporation has shown an amount of ` 1080.83 Crores as an exceptional item in the Statement of Profit and loss. Details of inventories write-down to NRV is as under;
` in Crores Paticulars 2019-20 Raw Material 54.97 Finished Goods, Stock-in-trade & Stock-in-process 1,025.86 Total 1,080.83 Note 70 In respect of equity investments in Numaligarh Refinery Limited (NRL), Cabinet Committee of Economic Affairs (CCEA) Government of India, in its meeting held on 20.11.2019, has accorded in-principle approval for Strategic disinvestment of Government of India shareholding in BPCL excluding BPCL’s shareholding in Numaligarh Refinery Ltd. Further, as per CCEA’s in-principle approval, investments in NRL has to be divested to a CPSE operating in the Oil & Gas Sector. Action in this regard is initiated and subject to other regulatory approvals disposal of these investments may happen subsequently. Note 71 The outbreak of COVID-19 globally and resultant lockdown in many countries, including from 25th March 2020 in India, had impact on the business of the Corporation. Consequently lower demand for crude oil and petroleum products has impacted the prices and therefore refining margins globally. Due to this, certain finished goods inventory and certain raw materials of the Corporation have been valued at net realizable value/replacement costs which are lower than cost. The impact of the same has been reported under exceptional item. Since petroleum products are under essential services, the refining and marketing operations of the Corporation was continued during the lock down period. Due to the lock down there was reduction in sales for the Corporation, however the reduction in sales is not material for the year 2019-20. The lock down of COVID-19 is continuing in FY 2020-21 and the Corporation is continuing its operations in major business units with current lower demand as these products are falling under essential goods and services. Management is expecting that demand for products will improve on stabilization of COVID-19, post removal of lockdown. Management has assessed the potential impact of COVID-19 based on the current circumstances and expects no significant impact on the continuity of operations of the business on long term basis/ on useful life of the assets/ on financial position etc. though there may be lower revenues and refinery throughput in the near term. Note 72 Figures of the previous year have been regrouped wherever necessary, to conform to current period presentation.
For and on behalf of the Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No.101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place: MUMBAI Date: 03rd June 2020
262 Bharat Petroleum Corporation Limited Consolidated Financial Statements INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF BHARAT PETROLEUM CORPORATION LIMITED Report on the Audit of the Consolidated Ind AS Financial Statements Opinion 1. We have audited the accompanying Consolidated Ind AS Financial Statements of Bharat Petroleum Corporation Limited (“hereinafter referred to as the Holding Company/Corporation”) and its subsidiaries (the Holding Company/ Corporation and its subsidiaries together referred to as “the Group”), its joint ventures and associates (refer Note 7 to the attached Consolidated Ind AS Financial Statements); comprising the Consolidated Balance Sheet as at 31st March 2020, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the Consolidated Ind AS Financial Statements”). 2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the auditors on financial statements and on the other financial information of the subsidiaries, joint ventures and associates, the aforesaid Consolidated Ind AS Financial Statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind AS”) and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March 2020, the consolidated profit, consolidated total comprehensive income, consolidated cash flows and consolidated changes in equity for the year ended on that date. Basis for Opinion 3. We conducted our audit of the Consolidated Ind AS Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Ind AS Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated Ind AS Financial Statements. Emphasis of Matter 4. We draw attention to the following matters in relation to the Consolidated Ind AS Financial Statements: I. We draw attention to Note No.70 to the Consolidated Ind AS Financial Statements, which describes the economic consequences/disruption the Group is facing as a result of COVID-19 pandemic, which is impacting consumer demand, financial markets, commodity prices and inventory valuation. II. The auditors of Bharat Petro Resources Limited (Subsidiary Company) have stated following under Emphasis of Matter in their Report on the consolidated financial statements of the said Subsidiary Company : i) About the incorporation of details of the Subsidiary Company’s share in Assets, Liabilities, Income & Expenses in the unincorporated joint operations of joint ventures based on the audited/unaudited statements received from the respective Operators as under: a) Out of fifteen Indian Blocks, audited statements of six blocks have not been received by the Company; hence, operator management certified figures have been considered. The total Assets & Liabilities as on 31st March 2020 and Income & Expenses for FY 2019-20 in respect of the said blocks amount to ` 330.38 Crores, ` 19.65 Crores, ` 106.47 Crores and ` 20.99 Crores respectively; b) In case of two foreign block (EP413) and Block 32 (Israel), Block audited statements have not been received by the Company. The total Assets & Liabilities as on 31st March 2020 and Income &
264 Bharat Petroleum Corporation Limited Expenses for FY 2019-20 in respect of the said block amounts to ` 102.06 Crores, ` 1.63 Crores, ` Nil and ` Nil respectively. However, Block 32 has been fully provided for during the year; c) The audited/unaudited statements referred above are prepared, as stated there in, to meet requirements of production sharing contracts/revenue sharing agreements and are special purpose statement; d) None of the statements, audited as well as unaudited, are drawn up in the format prescribed under Schedule III to the Act, as provisions of the Companies Act 2013 are not applicable to unincorporated joint operations; e) Some of the Operators use accounting policies other than those adopted by the Company for like transactions. The Company has made appropriate adjustments while incorporating relevant data; and f) The Company’s proportionate share in jointly controlled assets, liabilities for which the Company is jointly responsible, Company’s proportionate share of income and expenses for the year, the elements making up the Cash Flow Statements and related disclosures contained in the enclosed financial statements and our observations thereon are based on such audit reports and statements from the Operators to the extent available with the Company; ii) We draw attention to note on “Intangible Assets Under Development” where the Subsidiary Company has recognized an impairment loss of ` 594.00 Crores during the year on blocks (Forming part of Note No. 6 to Consolidated Ind AS Financial Statements). iii) We draw attention to the note on “Equity accounted Investees” regarding proportion of holding interest, pursuant to exercise of its right to cure partners default in IBV Brasil Petroleo Ltda (“IBV”), BPRL Ventures BV has infused an amount of USD 53.98 Mn up to 31st March 2020 in IBV resulting in a temporary increase in its share of paid-up capital in IBV to 55.13%. Given the temporary nature of increase in paid- up capital, IBV has been consolidated as Joint Venture by the BPRL Ventures BV as on 31st March 2020 (Forming part of Note No. 7 to the Consolidated Ind AS Financial Statements). Our opinion is not modified in respect of above matters.
Annual Report 2019-20 265 Key Audit Matters 5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Consolidated Ind AS Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
S. Key Audit Matter Auditors’ Response No. 1. Computation of Expected Credit Loss (ECL): Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as Trade receivables and loans granted under the follows: Pradhan Mantri Ujjwala Yojana (PMUY) scheme constitute a significant component of the total • In respect of loans granted under PMUY, the Corporation along with current assets of the Corporation. other few industry peers have derived a common methodology based on the broad category of active and inactive consumers At each reporting date, the Corporation recognizes and last refill date with expected loan recovery period. We checked Lifetime ECL on Trade Receivables using a the working of the same and it was in line with the common draft ‘simplified approach’ and 12 month ECL on loans methodology document shared with us. granted under the PMUY scheme, which rely on Management’s estimates regarding probability of • We have evaluated the methodology for age-wise bucketing of default rates linked to age-wise bucketing of the trade receivables and key assumptions underlying the probability corresponding asset. The COVID-19 pandemic may of default estimates on the same, to ascertain that the same also have an impact on the Management’s estimate were broadly in line with the Corporation’s historical default rates of probability of default as on 31st March 2020. and have considered available information regarding the current economic scenario. • We selected a few sample outstanding receivable cases having different overdue period and checked if the computation of ECL is appropriate in line with the Group’s policy. 2. Investments in E&P Assets: The following procedures were carried out in this regard: The Group along with its step down Subsidiaries, • We evaluated the design and implementation of key controls in JVs & Associates holds participating interest in relation to the impairment testing carried out by the Corporation various oil/ gas blocks for exploration & evaluation, for the investment in E&P subsidiary. development and production activities (E&P). • We reviewed the audited Consolidated Ind AS Financial Statements The Group’s realization from these E&P investments of BPRL and the independent auditor’s report thereon to ascertain if is dependent on the continued successful there are any signs of impairment in the Corporation’s investments operations/ development of reserves resulting therein. in expected earnings and revenue growth of the respective companies. The sharp global reduction in crude oil prices towards the end of FY 2019-20 triggered by the COVID-19 pandemic, may also impact the estimated revenue of these entities and hence the Group’s realization from E&P Investments.
266 Bharat Petroleum Corporation Limited S. Key Audit Matter Auditors’ Response No. 3. Evaluation of Contingent Liabilities: • We examined sample items above the threshold limit for recognition The Group has material uncertain positions of contingent liabilities and obtained details of completed Excise, including matters under dispute which involves VAT/ Sales Tax/ Entry Tax assessments and demands as on st March 2020. In FY 2019-20, due to various tax dispute significant judgment to determine the possible 31 settlement schemes, the Corporation has opted for dispute outcome of these disputes. Contingent liabilities are settlement in VAT/Sales tax related cases in many states and not recognized in the Consolidated Ind AS Financial obtained opinion from tax consultants in various matters. We Statements but are disclosed unless the possibility have relied upon such opinions where remote possibility of cash of an outflow of economic resources is considered outflow is indicated and the Corporation has considered the same remote. Contingent liabilities disclosed are in while preparation of the Consolidated Ind AS Financial Statements. respect of items which in each case are above the threshold limit. • We have assessed the Management’s underlying assumptions in estimating the possible outcome of the disputes. We also considered legal precedence and other rulings in evaluating Management’s position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions at beginning of the financial year to evaluate whether any change was required to Management’s position on these uncertainities. 4. Inventories: • We have relied on the physical verification of inventory of the Because of implementation of lockdown by Corporation carried out by the Management. We also evaluated Government due to outbreak of COVID-19, physical the system of inventory monitoring and control and reviewed data verification of the inventories of the Corporation was regarding sale of finished goods for sample regions during April not possible during the course of audit. Verification 2020. The physical verification of inventory has been conducted and valuation of Inventories is a significant area by the management at regular intervals. requiring Management’s judgment of estimates • In respect of the Corporation’s inventory lying with third parties, and application of accounting policies that have we have ascertained that these have substantially been confirmed significant effect on the amounts recognized in the by them. We examined the system for records maintenance for Consolidated Ind AS Financial Statements. stocks lying at third party locations. • We have also tested the values considered by the Corporation in respect of Net realizable value, cost of products and verified these with the inventory valuation and accounting entries posted in this regard. 5. Property, Plant & Equipment: • We examined whether the Corporation has maintained proper Estimates of useful lives and residual value of records showing full particulars, including quantitative details and Property, Plant and Equipment is a significant situation of fixed assets. area requiring Management judgment of estimates • The physical verification of fixed assets (except LPG Cylinders and application of accounting policies that have and pressure regulators with customers) has been carried out significant effect on the amounts recognized in the by the Management in accordance with the phased program of Consolidated Ind AS Financial Statements. verification of all assets and necessary accounting entries based on such physical verification has been appropriately posted which were reviewed by us. • Changes in the useful life of class of assets was adopted based on detailed internal evaluation and was also comparable with other entities in the same industry. We have tested the computation of depreciation on sample basis.
Annual Report 2019-20 267 Information Other than the Consolidated Ind AS Financial Statements and Auditors’ Report Thereon 6. The Corporation’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the Consolidated Ind AS Financial Statements and our audit report thereon. 7. Our opinion on the Consolidated Ind AS Financial Statements does not cover the other information and we do not express any form of assurance thereon. 8. In connection with our audit of the Consolidated Ind AS Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Consolidated Ind AS Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. 9. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Management’s Responsibility for the Consolidated Ind AS Financial Statements 10. The Holding Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to preparation of these Consolidated Ind AS Financial Statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated cash flows and consolidated changes in equity of the Group in accordance with the Ind AS and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group are responsible for maintenance of the adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. 11. In preparing the Consolidated Ind AS Financial Statements, the respective Board of Directors of the companies included in the Group, joint ventures and its associates are responsible for assessing the ability of the Group and of its joint ventures and associates to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 12. The respective Board of Directors of the companies included in the Group, joint ventures and its associates are also responsible for overseeing the financial reporting process of the said companies. Other Matters 13. We did not audit the financial statements of three subsidiaries, whose financial statements /financial information reflect total assets of ` 31,913.12 Crores and net assets of ` 9,407.16 Crores as at 31st March 2020, total revenues of ` 14,452.48 Crores, net profit of ` 1,233.22 Crores and net cash inflows amounting to ` 295.10 Crores for the year ended on that date, as considered in the Consolidated Ind AS Financial Statements. The Consolidated Ind AS Financial Statements also include the Group’s share of net loss of ` 393.88 Crores for the year ended 31st March 2020, as considered in the Consolidated Ind AS Financial Statements, in respect of eight joint ventures and three associates, whose financial statements/financial information have not been audited by us. These financial statements/financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the Consolidated Ind AS Financial Statements in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-section (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on such reports of the other auditors.
268 Bharat Petroleum Corporation Limited 14. The Consolidated Ind AS Financial Statements include the Group share of net profit of ` 749.73 Crores for the year ended 31st March, 2020 in respect of six joint ventures and three associates, whose financial statements/financial information have not been audited by us. These financial statements/financial information are unaudited and have been furnished to us by the Management, and our opinion on the Consolidated Ind AS Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these joint ventures and associates, and our report in terms of sub-section (3) and (11) of Section 143 of the Act in so far as it relates to the aforesaid joint ventures and associates, is based solely on such unaudited financial statements/financial information. In our opinion and according to the information and explanations given by the Management, the variation, if any, in these financial statements is not expected to be material. Our opinion above on the Consolidated Ind AS Financial Statements, and our report on Other Legal and Regulatory Requirements and Internal Financial Controls as per Annexure-A below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/financial information certified by the Management. Auditors’ Responsibilities for the Audit of the Consolidated Ind AS Financial Statements 15. Our objectives are to obtain reasonable assurance about whether the Consolidated Ind AS Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Consolidated Ind AS Financial Statements. 16. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Consolidated Ind AS Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company and its subsidiary companies which are companies incorporated in India, have adequate internal financial controls system in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the Consolidated Ind AS Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group, joint ventures and its associates to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Consolidated Ind AS Financial Statements, including the disclosures, and whether the Consolidated Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Annual Report 2019-20 269 • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Ind AS Financial Statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the Consolidated Ind AS Financial Statements of which we are the independent auditors. For the other entities included in the Consolidated Ind AS Financial Statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. 17. Materiality is the magnitude of misstatements in the Consolidated Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Consolidated Ind AS Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Consolidated Ind AS Financial Statements. 18. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 19. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 20. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Consolidated Ind AS Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements 21. As required by Section 143(3) of the Act, based on our audit we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid Consolidated Ind AS Financial Statements. b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid Consolidated Ind AS Financial Statements have been kept so far as it appears from our examination of those books. c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), Consolidated Statement of Cash Flows and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the Consolidated Ind AS Financial Statements. d) In our opinion, the aforesaid Consolidated Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act. e) In view of exemption given vide Notification No. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of directors, are not applicable to the Holding company and in case of other companies, on the basis of report of the statutory auditors of the respective Companies of the Group, joint ventures and its associates incorporated in India, none of the directors is disqualified as on 31st March 2020 from being appointed as a director in terms of Section 164(2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in Annexure-A which is based on the report of the statutory auditors of the respective Companies of the Group, joint ventures and its associates incorporated in
270 Bharat Petroleum Corporation Limited India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the internal financial control over financial reporting of those companies, for reasons stated therein. g) In view of exemption given vide Notification No. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the holding company. h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: i. The Consolidated Ind AS Financial Statements disclose the impact of pending litigations as at 31st March 2020 on consolidated financial position of the group, joint ventures and associates (Refer Note No. 62 of the Consolidated Ind AS Financial Statements). ii. Provision has been made in the Consolidated Ind AS Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts as at 31st March 2020. iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, and its subsidiaries, joint ventures and associates incorporated in India.
For CVK & Associates For Borkar & Muzumdar Chartered Accountants Chartered Accountants ICAI FRN. 101745W ICAI FRN. 101569W
Sd/- Sd/- A K Pradhan Kaushal Muzumdar Partner Partner Membership No. 032156 Membership No.100938 UDIN: 20032156AAAAAH1436 UDIN: 20100938AAAAAT9610
Place: Mumbai Date: 03rd June,2020
Annual Report 2019-20 271 ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT
[Referred to in paragraph 21(f) under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditors’ Report of even date to the members of Bharat Petroleum Corporation Limited on the Consolidated Ind AS Financial Statements for the year ended 31st March 2020] Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the Consolidated Ind AS Financial Statements of the Group, its joint ventures and associates as on and for the year ended 31st March 2020, we have audited the internal financial controls over financial reporting of Bharat Petroleum Corporation Limited (“the Holding Company/Corporation”) and its subsidiaries, joint ventures and associates, which are companies incorporated in India, as of that date. Management’s Responsibility for Internal Financial Controls The Board of Directors of the Holding Company, its subsidiaries, joint ventures and associates, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“the ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the respective company’s business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditors’ Responsibility Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Holding Company, its subsidiaries, joint ventures and associates, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Holding Company, its subsidiaries, joint ventures and associates, which are companies incorporated in India. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Consolidated Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that 1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
272 Bharat Petroleum Corporation Limited 2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Ind AS Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and 3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the Consolidated Ind AS Financial Statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion and to the best of our information and according to the explanations given to us, the Holding Company, its subsidiaries, joint ventures and associates, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2020, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Other Matters Our aforesaid reports under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to three subsidiaries, seven joint ventures and three associates which are companies incorporated in India, is based on the corresponding reports issued by auditors of such companies, which do not disclose any material inadequacy in the internal financial controls over financial reporting. Our opinion is not modified in respect of this matter. For CVK & Associates For Borkar & Muzumdar Chartered Accountants Chartered Accountants ICAI FRN. 101745W ICAI FRN. 101569W
Sd/- Sd/- A K Pradhan Kaushal Muzumdar Partner Partner Membership No. 032156 Membership No.100938 UDIN: 20032156AAAAAH1436 UDIN: 20100938AAAAAT9610
Place: Mumbai Date: 03rd June,2020
Annual Report 2019-20 273 Consolidated Balance Sheet as at 31st March 2020
` in Crores Note No. As at As at 31/03/2020 31/03/2019 I. ASSETS (1) Non-current Assets (a) Property, Plant and Equipment 2 59,761.10 48,971.04 (b) Capital Work-In-Progress 3 9,948.51 7,292.90 (c) Investment Property 4 32.87 0.24 (d) Other Intangible assets 5 380.60 343.56 (e) Intangible Assets Under Development 6 7,808.23 6,361.59 (f) Investments accounted for using Equity Method 7 21,532.11 18,088.74 (g) Financial Assets (i) Investments 8 287.86 1,019.08 (ii) Loans 9 4,987.27 3,829.21 (iii) Other Financial Assets 10 27.24 86.52 (h) Income Tax Assets (Net) 11 1,381.25 449.40 (i) Deferred Tax Assets (Net) 28 3.58 4.27 (j) Other Non-current Assets 12 1,461.19 1,702.18 1,07,611.81 88,148.73 (2) Current Assets (a) Inventories 13 22,242.60 22,934.87 (b) Financial Assets (i) Investments 14 5,208.54 5,799.09 (ii) Trade Receivables 15 5,378.02 6,906.25 (iii) Cash and Cash Equivalents 16 799.63 414.25 (iv) Bank Balances other than Cash and Cash Equivalents 17 365.21 248.27 (v) Loans 18 704.86 1,684.71 (vi) Other Financial Assets 19 6,740.65 9,437.65 (c) Current Tax Assets (Net) 20 137.09 33.17 (d) Other Current Assets 21 1,654.08 1,309.61 43,230.68 48,767.87 (3) Assets held for sale 22 21.07 13.78 TOTAL ASSETS 1,50,863.56 1,36,930.38 II. EQUITY AND LIABILITIES (1) Equity (a) Equity Share Capital 23 1,966.88 1,966.88 (b) Other Equity 24 34,565.45 36,797.84 Equity attributable to owners 36,532.33 38,764.72 Non Controlling interests 2,056.33 2,070.04 Total Equity 38,588.66 40,834.76 (2) Liabilities (1) Non-current Liabilities (a) Financial Liabilities (i) Borrowings 25 43,853.07 34,315.58 (ii) Other Financial Liabilities 26 58.69 56.67 (b) Provisions 27 1,595.99 1,537.63 (c) Deferred Tax Liabilities (Net) 28 6,163.92 6,792.01 (d) Other Non-current Liabilities 29 381.72 284.01 52,053.39 42,985.90 (2) Current Liabilities (a) Financial Liabilities (i) Borrowings 30 17,795.15 8,598.95 (ii) Trade Payables 31 a. Total outstanding dues of Micro Enterprises and Small Enterprises 69.20 57.04 b. Total outstanding dues of creditors other than Micro and Small 13,038.01 17,777.43 Enterprises (iii) Other Financial Liabilities 32 23,121.09 19,608.47 (b) Other Current Liabilities 33 4,125.82 4,708.02 (c) Provisions 34 2,039.39 2,028.58 (d) Current Tax Liabilities (Net) 35 32.85 331.23 60,221.51 53,109.72 Total Liabilities 1,12,274.90 96,095.62 TOTAL EQUITY AND LIABILITIES 1,50,863.56 1,36,930.38 Significant Accounting Policies 1 Notes forming part of Financial Statements 44 to 71 For and on behalf of Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No. 101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place : MUMBAI Date : 03rd June 2020
274 Bharat Petroleum Corporation Limited Consolidated Statement of Profit and Loss for the year ended 31st March 2020
` in Crores Note No. 2019-20 2018-19 I) Revenue from operations 36 3,29,797.16 3,40,879.15 II) Other income 37 1,929.33 2,037.54 III) Total Income ( I + II ) 3,31,726.49 3,42,916.69 IV) Expenses Cost of raw materials consumed 38 1,21,896.01 1,30,693.29 Purchases of stock-in-trade 39 1,31,769.19 1,32,055.42 Changes in inventories of finished goods, work-in-progress and stock-in-trade 40 (1,073.07) (1,606.26) Excise duty 45,225.26 42,653.56 Employee benefits expense 41 4,020.51 3,984.03 Finance costs 42 2,637.01 1,763.95 Depreciation and amortization expense 2,4,5 4,080.09 3,417.77 Other expenses 43 19,610.24 17,986.88 Total expenses (IV) 3,28,165.24 3,30,948.64 V) Profit from continuing operations before share of profit of equity accounted 3,561.25 11,968.05 investees, exceptional item and income tax (III - IV) VI) Share of profit of equity accounted investee (net of income tax) 1,400.67 937.32 VII) Exceptional Item (Refer Note No. 69) 1,310.35 - VIII) Profit from continuing operations before income tax (V + VI - VII) 3,651.57 12,905.37 IX) Tax expense 28 1) Current tax 629.96 3,109.18 2) Deferred tax (14.49) 1,367.53 3) Short / (Excess) provision of earlier years (629.68) (99.19) Total tax expense (14.21) 4,377.52
X) Profit for the period ( VIII-IX) 3,665.78 8,527.85
XI) Other Comprehensive Income (OCI) 587.84 (1,172.47) (i) Items that will not be reclassified to profit or loss (a) Remeasurements of defined benefit plans (326.29) (209.79) (b) Equity instruments through Other Comprehensive Income- net change in (322.27) (71.08) fair value (c) Equity accounted investees - share of OCI (2.51) 0.03 (ii) Income tax related to items that will not be reclassified to profit or loss 119.28 80.82 (iii) Items that will be reclassified to profit or loss (a) Exchange differences in translating financial statements of foreign 348.88 305.44 operations (b) Equity accounted investees - share of OCI 770.75 (1,277.89) XII) Total Comprehensive Income for the period (X+XI) 4,253.62 7,355.38 Profit attributable to: Owners of the company 3,055.36 7,802.30 Non-Controlling Interests 610.42 725.55 Profit for the period 3,665.78 8,527.85 Other Comprehensive Income attributable to : Owners of the company 599.84 (1,173.05) Non-Controlling Interests (12.00) 0.58 Other Comprehensive Income for the period 587.84 (1,172.47) Total Comprehensive Income attributable to : Owners of the company 3,655.20 6,629.25 Non-Controling Interests 598.42 726.13 Total Comprehensive Income for the period 4,253.62 7,355.38 XIII) Basic and Diluted Earnings Per Equity Share (Face value ` 10) 54 15.53 39.67 Significant Accounting Policies 1 Notes forming part of Financial Statements 44 to 71 For and on behalf of Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No. 101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place : MUMBAI Date : 03rd June 2020
Annual Report 2019-20 275 Consolidated Statement of Cash Flows
` in Crores For the Year ended 2019-20 2018-19 A Net Cash Flow from Operating Activities Net Profit Before Tax (After Exceptional Items) 3,651.57 12,905.37 Adjustments for : Share of (Profit) / Loss from Equity Accounted Investees (1,400.67) (937.32) Depreciation 4,080.09 3,417.77 Finance Costs 2,637.01 1,763.95 Foreign Exchange Fluctuations 1,027.94 188.38 (Profit) / Loss on Sale of Property, Plant and Equipment 44.09 (3.89) (Profit) / Loss on Sale of Investments (36.20) (27.79) Income from Investments (1,059.72) (1,071.97) Dividend Received (44.55) (46.95) Expenditure towards Corporate Social Responsibility 286.59 258.17 Other Non-Cash items* 530.87 248.74 Operating Profit before Working Capital Changes 9,717.02 16,694.46 (Invested in)/Generated from : Inventories 692.27 (403.93) Trade Receivables 2,348.71 (1,747.76) Other Receivables 1,938.00 (6,277.01) Current Liabilities & Payables (4,497.72) 4,897.21 Cash generated from Operations 10,198.28 13,162.97 Direct Taxes Paid (1,827.32) (2,773.02) Paid for Corporate Social Responsibility (397.50) (232.80) Net Cash from / (used in) Operating Activities 7,973.46 10,157.15 B. Net Cash Flow from Investing Activities Purchase of Property, Plant and Equipment / Intangible Assets (12,289.41) (10,541.30) Sale of Property, Plant and Equipment 27.33 40.20 Capital Advance 70.64 (56.33) Investment in Equity Accounted Investees (1,627.17) (1,169.07) Sai Wardha Power Generation Limited (Equity) 0.00 2.30 Purchase of Investments (39,104.30) (49,830.05) Sale of Investments 40,312.91 49,638.96 Interest Received 1,041.68 1,124.22 Dividend Received 340.76 339.90 Net Cash from / (used in) Investing Activities (11,227.56) (10,451.17) C Net Cash Flow from Financing Activities Repayment of Lease Liability (611.87) - Short Term Borrowings (Net) 8,891.48 288.88 Long Term Borrowings** 9,547.44 7,114.28 Repayment of Loans ** (6,023.38) (816.03) Interest Paid (1,702.68) (1,476.81) Dividend Paid (5,326.62) (4,005.83) Dividend Distribution Tax (1,191.16) (897.45) Net Cash from / (used in) Financing Activities 3,583.21 207.04 D Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 329.11 (86.98)
276 Bharat Petroleum Corporation Limited Consolidated Statement of Cash Flows (Contd.)
` in Crores For the Year ended 2019-20 2018-19 Cash and Cash Equivalents as at 31/03/2019 31/03/2018 Cash on hand 33.27 17.70 Cheques and drafts on hand 24.70 16.19 Cash at Bank 179.08 559.71 Demand deposits with Banks with original maturity of less than three months 177.20 - Less : Bank Overdraft (214.40) (306.77) 199.85 286.83
Cash and Cash Equivalents as at 31/03/2020 31/03/2019 Cash on hand 6.13 33.27 Cheques and drafts on hand 6.10 24.70 Cash at Bank 323.07 179.08 Demand deposits with Banks with original maturity of less than three months 464.34 177.20 Less : Bank Overdraft (270.68) (214.40) 528.96 199.85
Net change in Cash and Cash Equivalents 329.11 (86.98)
* Includes FCMITDA Amortization loss of ` 80.96 Crores (Previous year loss ` 66.72 Crores) ** Includes refinancing of ECB of USD 330 Million
Disclosure to changes in liabilities arising from Financing Activities ` in Crores Short term Long term Total liabilities Borrowings Borrowings from Financing Particulars (excluding Bank (including Activities Overdraft) current maturities) As on 31st March 2018 7,786.26 29,566.23 37,352.49 Cash flows 288.88 6,298.25 6,587.13 Non cash changes a) Foreign exchange movement 309.41 281.64 591.05 b) Recognition of deferred income and its - 70.73 70.73 amortization c) Fair value changes - 32.26 32.26 d) Others changes - (9.07) (9.07) As on 31st March 2019 8,384.55 36,240.04 44,624.59
Annual Report 2019-20 277 Consolidated Statement of Cash Flows (Contd.)
` in Crores Short term Long term Total liabilities Borrowings Borrowings from Financing Particulars (excluding Bank (including Activities Overdraft) current maturities) As on 31st March 2019 8,384.55 36,240.15 44,624.70 Cash flows 8,891.48 3,547.95 12,439.43 Non cash changes a) Foreign exchange movement 248.44 1,892.79 2,141.23 b) Recognition of deferred income and its - 2.49 2.49 amortization c) Increase in Lease Obligations due to Ind AS - 5,961.07 5,961.07 116 d) Fair value changes - 35.94 35.94 As on 31st March 2020 17,524.47 47,680.39 65,204.86 Explanatory notes to Statement of Cash Flows 1. The Statement of Cash Flows is prepared in accordance with the format prescribed by Securities and Exchange Board of India and as per Ind AS 7 as notified by Ministry of Corporate Affairs. 2. In Part-A of the Statement of Cash Flows, figures in brackets indicate deductions made from the Net Profit for deriving the net cash flow from operating activities. In Part-B and Part-C, figures in brackets indicate cash outflows. 3. The net profit / loss arising due to conversion of current assets / current liabilities, receivable / payable in foreign currency is furnished under the head “Foreign Exchange Fluctuations”. 4. “Other Non-Cash items” include excess provisions written back, diminution in value of investment, Reversal of excess capitalization, amortization of Capital grant, Bad debts and materials written off and miscellaneous adjustments not affecting Cash Flow. 5. “Current Liabilities and Payables” may include Payables in respect of Purchase of Property, Plant and Equipments, if any.
For and on behalf of Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No. 101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place : MUMBAI Date : 03rd June 2020
278 Bharat Petroleum Corporation Limited - - - - 66.72 364.27 (44.85) equity (162.82) (897.45) 8,527.85 36,511.93 36,556.78 38,867.88 (1,172.47) (4,370.15) ` in Crores Total other (202.37) 2,169.25 2,169.25 1,966.88 ------` in Crores 0.58 Amount 725.55 (95.69) (465.49) 1,905.09 1,905.09 2,070.04 to NCI^ Attributable - - - - 66.72 364.27 Total (44.85) of the (162.82) (801.76) 7,802.30 34,606.84 34,651.69 36,797.84 to Owners (3,904.66) (1,173.05) attributable Corporation
------As at 31/03/2019 24] BPCL (456.74) (456.74) (456.74) Trust for [Note No. in Shares Investment (20,23,72,422) 2,16,92,52,744 2,16,92,52,744 1,96,68,80,322 No. of Shares ------78.99 78.99 15.41 (63.58) - Equity Income M arch 2020 Instruments [Note No. 24] through Other Comprehensive st ------(202.37) 2,169.25 2,169.25 1,966.88 24] 368.81 Amount Foreign (972.45) Reserve 1,341.26 1,341.26 Currency [Note No. Translation
------
66.72 66.76 66.76 - (29.34) (162.82) (FCMITDA) Translation [Note No. 24] Monetary Item As at 31/03/2020 Foreign Currency Difference Account - - 5.62 364.27 (44.85) 24]* (20,23,72,422) 2,16,92,52,744 2,16,92,52,744 1,96,68,80,322 No. of Shares (801.76) (295.91) (137.02) 7,802.30 3,500.22 3,545.07 4,033.06 Earnings Retained [Note No. (2,500.00) (3,904.66) ------24] 243.92 General Reserve 2,500.00 [Note No. 28,651.63 28,651.63 31,395.55 ------Reserves & Surplus 24] 295.91 (249.54) Reserve 1,132.94 1,132.94 1,179.31 [Note No. Debenture Redemption ------24] 249.79 249.79 249.79 Reserve Premium [Note No. Securities ------24] (31.00) (31.00) (31.00) Capital JVCs and [Note No. associates Reserve on subsidiaries, Acquisition of ------72.99 72.99 72.99 24] Capital Reserve [Note No. March 2018 March 2019 st st Balance at 31 Additions/(deletions) during the year - FCMITDA Amortization during the year - FCMITDA Transfer from Debenture Redemption Reserve Transfer to General Reserve Dividend Distribution Tax on Dividends Transfer to Debenture Redemption reserve Dividends Dividend to BPCL Trust for Investment in Shares (Refer Note No. 46) Other Comprehensive Income for the year Profit for the year (b) Other Equity (a) Equity Share Capital Balance at the beginning of reporting period Transfer to Deferred Income on account of implementation of Ind AS 115 (net tax) Opening Balance after the above effect Balance at the end of reporting period Add: Issue of Bonus Shares (Refer Note No. 23) Less: Adjustment for Shares held by BPCL Trust Investment in (Refer Note No. 46) Balance at the end of reporting period after Adjustment Balance at 31 C onsolidated S tatement of hanges in Eq uity for the Y ear ended 31
Annual Report 2019-20 279 - - - 4.45 80.96 495.81 587.84 (51.62) (11.29) equity 3,665.78 36,621.78 38,867.88 38,856.59 (1,195.61) (5,822.42) ` in Crores Total other ------610.42 (12.00) (104.38) (507.75) 2,056.33 2,070.04 2,070.04 to NCI^ Attributable - - - 4.45
80.96 495.81 599.84 Total (51.62) (11.29) of the 3,055.36 34,565.45 36,797.84 36,786.55 to Owners (1,091.23) (5,314.67) attributable Corporation
------24] BPCL (456.74) (456.74) (456.74) Trust for [Note No. in Shares Investment Borkar & Muzumdar Chartered Accountants ICAI FR No. 101569W Sd/- Kaushal Muzumdar Partner Membership No. 100938 ------` (257.56) Crores] of the Corporation 15.41 15.41 (312.93) (297.52) Equity Income M arch 2020 (C ontd .) Instruments For and on behalf of [Note No. 24] through Other Comprehensive st ------24] As per our attached report of even date 368.81 368.81 Foreign Reserve 1,119.63 1,488.44 Currency [Note No. Translation ------
80.96 (51.62) (29.34) (29.34) (FCMITDA) Translation [Note No. 24] Monetary Item Foreign Currency Difference Account - - - March 2020 ` (442.62) Crores [Previous year st 4.45 CVK & Associates Chartered Accountants ICAI FR No.101745W Sd/- A.K. Pradhan Partner Membership No. 032156 495.81 24]* (11.35) ` 282.08 Crores) (293.21) (206.86) (352.84) 3,055.36 4,033.06 4,021.71 Earnings Retained [Note No. (1,024.20) (1,091.23) (5,314.67) ------24] 377.40 General Reserve 1,024.20 [Note No. 32,797.15 31,395.55 31,395.55 ------Reserves & Surplus 24] 293.21 (377.40) Reserve 1,095.12 1,179.31 1,179.31 [Note No. Debenture Redemption ------24] 249.79 249.79 249.79 Reserve Premium [Note No. Securities ------March 2020 ` 282.08 Crores (Previous year st (31.00) (31.00) (31.00) Capital Sd/- V. Kala Company Secretary JVCs and associates Reserve on subsidiaries, [Note No. 24] Acquisition of ------0.06 73.05 72.99 73.05 24] Capital Reserve [Note No. June 2020 rd : MUMBAI : 03 Balance at 31st March 2020 Additions/(deletions) during the year - FCMITDA Amortization during the year - FCMITDA *The balance includes accumulated Gain/(loss) on account of Remeasurements defined benefit plans (Net tax) as 31 Transfer from Debenture Redemption Reserve Transfer to General Reserve Add/Less: Dividend Distribution pertaining Add/Less: tax to Previous years Dividend Distribution Tax on Dividends Transfer to Debenture Redemption reserve Dividend to BPCL Trust for Investment in Shares (Refer Note No. 46) Dividends (b) Other Equity Other Comprehensive Income for the year ^ Includes share capital attributable to Non-Controlling Interest as on 31 Balance at 31st March 2019 Opening Balance adjustment Balance after the above effect Profit for the year Sd/- D. Rajkumar Chairman and Managing Director DIN: 00872597 Sd/- N. Vijayagopal Director (Finance) DIN: 03621835 Place Date For and on behalf of Board Directors C onsolidated S tatement of hanges in Eq uity for the Y ear ended 31
280 Bharat Petroleum Corporation Limited NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2020 1. Statement of Significant Accounting Policies: The Consolidated Financial Statements relate to Bharat Petroleum Corporation Limited (BPCL or Parent Company or Corporation), its Subsidiary Companies and interest in Joint Ventures and Associates. The Corporation and its Subsidiaries are together referred to as “Group”. 1.1. Basis for preparation: The Consolidated Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (“Act”) read with Companies (Indian Accounting Standards) Rules, 2015; and other relevant provisions of the Act and Rules thereunder. The Financial Statements of the Subsidiary Companies, Joint Venture Companies (JVCs) and the Associates used in the preparation of the Consolidated Financial Statements are drawn upto the same reporting date as that of BPCL i.e. 31st March 2020, except for Matrix Bharat Pte. Ltd. whose accounts are drawn for the year ended 31st December 2019, where there are no significant transactions or other events that have occurred between 1st January 2020 and 31st March 2020. The Consolidated Financial Statements have been prepared under historical cost convention basis, except for certain assets and liabilities measured at fair value. The Group has adopted all the Ind AS and the adoption was carried out during Financial Year 2016-17 in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards. The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the “Previous GAAP”. The functional currency of the Corporation and its Indian Subsidiaries is Indian Rupees (`), whereas the functional currency of foreign subsidiaries is USD ($). The presentation currency of the group is Indian Rupees (`). All figures appearing in the consolidated financial statements are rounded to the nearest Crores (` Crores), except where otherwise indicated. In case of some Joint Venture Companies and Associates, certain accounting policies are different from that of the parent company, the impact of which is not expected to be material. The threshold limits for the Group has been applied as per their respective financial statements and the same has been specified in Note No. 1.34. Authorization of Consolidated Financial Statements: The Consolidated Financial Statements were authorized for issue in accordance with a resolution of the Board of Directors in its meeting held on 03rd June 2020. The percentage of ownership interest of the Corporation in the Subsidiary Companies, JVCs and Associates as on 31st March 2020 are as under:
Percentage (%) of actual Country of S. No. Particulars ownership interest as on Incorporation 31/03/2020 31/03/2019 A. Subsidiaries 1. Numaligarh Refinery Limited (NRL) India 61.65 61.65 2. Bharat Gas Resources Limited (BGRL) India 100.00 100.00 3. Bharat PetroResources Limited (BPRL) India 100.00 100.00 4. Bharat PetroResources JPDA Limited (Note i) India 100.00 100.00 5. BPRL International BV (Note i) Netherlands 100.00 100.00 6. BPRL International Singapore Pte Ltd. (Note i) Singapore 100.00 100.00 7. BPRL Ventures BV (Note ii) Netherlands 100.00 100.00 8. BPRL Ventures Mozambique BV (Note ii) Netherlands 100.00 100.00 9. BPRL Ventures Indonesia BV (Note ii) Netherlands 100.00 100.00 10. BPRL International Ventures BV (Note ii) Netherlands 100.00 100.00
Annual Report 2019-20 281 Percentage (%) of actual Country of S. No. Particulars ownership interest as on Incorporation 31/03/2020 31/03/2019 B. Joint Venture Companies 1. Bharat Oman Refineries Limited (Note xvi) India 63.38 50.00 2. Central UP Gas Limited India 25.00 25.00 3. Maharashtra Natural Gas Limited India 22.50 22.50 4. Sabarmati Gas Limited India 49.94 49.94 5. Bharat Stars Services Private Limited India 50.00 50.00 6. Bharat Renewable Energy Limited (Note iv) India 33.33 33.33 7. Matrix Bharat Pte. Ltd. Singapore 50.00 50.00 8. Delhi Aviation Fuel Facility Private Limited India 37.00 37.00 9. IBV (Brasil) Petroleo Ltda. (Note iii) Brazil 50.00 50.00 10. Mumbai Aviation Fuel Farm Facility Private Limited India 25.00 25.00 11. Kochi Salem Pipeline Private Limited India 50.00 50.00 12. BPCL-KIAL Fuel Farm Private Limited India 74.00 74.00 13. Haridwar Natural Gas Private Limited India 50.00 50.00 14. Goa Natural Gas Private Limited India 50.00 50.00 15. DNP Limited (Note vi) India 26.00 26.00 16. Taas India Pte Ltd. (Note vii) Singapore 33.00 33.00 17. Vankor India Pte Ltd. (Note vii) Singapore 33.00 33.00 18. Falcon Oil & Gas BV (Note xi) Netherlands 30.00 30.00 19. Ratnagiri Refinery & Petrochemicals Limited India 25.00 25.00 20. LLC TYNGD (Note viii) Russia 9.87 9.87 21. Urja Bharat Pte. Ltd. (Note xii) Singapore 50.00 50.00 22. Assam Bio Refinery Private Limited (Note vi) India 50.00 50.00 23. Indradhanush Gas Grid Limited (Note vi) India 20.00 20.00 24. IHB Private Limited India 25.00 - C. Associates 1. Indraprastha Gas Limited India 22.50 22.50 2. Petronet LNG Limited India 12.50 12.50 3. GSPL India Gasnet Limited India 11.00 11.00 4. GSPL India Transco Limited India 11.00 11.00 5. Kannur International Airport Limited (Note v) India 16.20 18.68 6. Petroleum India International (Note xv) India - 18.18 7. Petronet India Limited (Note xiii) India 16.00 16.00 8. Petronet CI Limited (Note iv) India 11.00 11.00 9. FINO Paytech Limited India 20.73 20.73 10. Brahmaputra Cracker and Polymer Limited (Note vi) India 10.00 10.00 11. Mozambique LNG 1 Company Pte Ltd. (Note ix) Singapore 10.00 10.00 12. Mozambique LNG1 Holding Co. Ltd. (Note xiv) UAE 10.00 - 13. Mozambique LNG1 Financing Company Ltd. (Note xiv) UAE 10.00 - 14. JSC Vankorneft (Note x) Russia 7.89 7.89 Ujjwala Plus Foundation is a joint venture of IOCL, BPCL and HPCL with fund contribution in the ratio of 50:25:25 which was incorporated as a limited by guarantee company (without share capital) under section 8 of Companies Act, 2013.
282 Bharat Petroleum Corporation Limited Notes: i. Bharat PetroResources JPDA Limited, BPRL International BV and BPRL International Singapore Pte. Ltd. are 100% subsidiaries of BPRL. ii. BPRL Ventures BV, BPRL Ventures Mozambique BV, BPRL Ventures Indonesia BV and BPRL International Ventures BV are wholly owned subsidiaries of BPRL International BV which have been incorporated outside India. iii. BPRL Ventures BV holds 50% equity in Joint Venture Company IBV (Brasil) Petroleo Ltda., incorporated in Brazil. During FY 2019-20, Pursuant to exercise of its right to cure partners default in IBV Brasil Petroleo Ltda, BPRL Ventures BV has infused an amount of USD 53.98 Mn upto 31st March 2020 in IBV resulting in a temporary increase in its paid-up capital in IBV to 55.13%. Given the temporary nature of increase in paid-up capital, IBV has been consolidated as Joint Venture by BPRL Ventures BV as on 31st March 2020. iv. Consolidation in respect of Investment in Petronet CI Limited and Bharat Renewable Energy Limited have not been considered in the preparation of Consolidated Financial Statements as the Parent company has decided to exit from these Companies and provision for full diminution in the value of investment has been done in the standalone financial statements of the parent company. v. Kannur International Airport Limited has not prepared its financial statements for FY 2019-20 and the same has not been considered for consolidation as the same is not expected to be material. For FY 2018-19, the percentage shareholding in Kannur International Airport Limited is after excluding calls received for the rights issue, for which subscription of shares were pending. vi. Brahmaputra Cracker and Polymer Limited is an Associate of NRL and DNP Limited, Assam Bio Refinery (P) Ltd. and Indradhanush Gas Grid Ltd. are Joint Ventures of NRL. The Financial Statement for FY 2019-20 for these company has been taken based on Management estimates while consolidating the Financial Statements by NRL. vii. Taas India Pte Ltd. and Vankor India Pte Ltd., are joint venture companies of BPRL International Singapore Pte Ltd. viii. LLC TYNGD is a Joint Venture of Taas India Pte Ltd. ix. Mozambique LNG1 Holding Company Ltd is an associate of BPRL Ventures Mozambique BV. x. JSC Vankorneft is an associate of Vankor India Pte Ltd. xi. Falcon Oil & Gas BV is a joint venture of BPRL International Ventures BV. xii. Urja Bharat Pte Ltd. is a joint venture of BPRL International Singapore Pte. Ltd. xiii. Petronet India Limited has gone under winding up. Consolidation has been done based on the declaration of solvency by the management of company. xiv. Further, Mozambique LNG1 Company Pte. Ltd. and Mozambique LNG1 Financing Company Ltd. are the Wholly owned Subsidiary Company of Mozambique LNG1 Holding Company Ltd. xv. During the year, Petroleum India International has been dissolved. xvi. In addition to the ownership interest, BPCL has made an investment in Compulsorily Convertible Debentures and Warrants in Bharat Oman Refinery Limited. Change in equity ownership interest during the year is due to conversion of warrants into equity shares. xvii. The financial statements of Indraprastha Gas Limited, Petronet LNG Limited, Central UP Gas Limited, Sabarmati Gas Limited, Maharashtra Natural Gas Limited, Bharat Stars Services Private Limited, BPCL-KIAL Fuel Farm Private Limited, Haridwar Natural Gas Private Limited and FINO Paytech Limited are yet to be audited and hence provisional financial statements provided by management of the respective companies have been considered for the purpose of preparation of Consolidated Financial Statements.
Annual Report 2019-20 283 1.2. Basis of Consolidation 1.2.1. Subsidiaries Subsidiaries are entities controlled by the Corporation. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity’s returns. The financial statements of the subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which the control ceases. Subsidiaries are consolidated by combining like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries. The intra-company balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. These consolidated financial statements are prepared by applying uniform accounting policies in use at the Corporation. Non-controlling interests (“NCI”) which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the company, are excluded. Changes in the Corporation’s equity interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. 1.2.2. Joint Ventures and Associates A joint venture is an arrangement in which the Corporation has joint control and has rights to the net assets of the arrangement, rather than the rights to its assets and obligation for its liabilities. An associate is an entity in which the Corporation has significant influence, but no control or joint control over the financial and operating policies. Interest in joint ventures and associates are accounted for using the equity method. They are initially recognized at cost which includes transaction cost. Subsequent to initial recognition the consolidated financial statements include the JVCs and associates share of profit or loss and Other Comprehensive Income (“OCI”) of such entities until the date on which significant influence or joint control ceases. Unrealised gains / losses arising from transactions with such entities are eliminated against the investment to the extent of the Corporation’s interest in the investee. 1.2.3. Business Combinations In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, the Group has elected to apply the requirements of Ind AS 103, “Business Combinations” prospectively to business combinations on or after the date of transition (1st April 2015). Pursuant to this exemption, goodwill / capital reserve arising from business combination has been stated at the carrying amount under Previous GAAP. In accordance with Ind AS 103, the Group accounts for these business combinations using the acquisition method when the control is transferred to the Group. The consideration transferred for the business combinations is generally measured at fair value as at the date the control is acquired (acquisition date), of the net identifiable assets acquired. Any goodwill that arises is tested annually for impairment. If a business combination is achieved in stages, any previously held equity interest in the acquiree is re-measured at its acquisition date fair value and any resulting gain or loss is recognized in Statement of Profit or Loss or OCI as appropriate. Common Control Business combinations involving entities that are ultimately controlled by the same party(ies) before and after the business combination are considered as Common Control entities and are accounted using the pooling of interest method as follows: - The assets and liabilities of the combining entities are reflected at their carrying amounts.
284 Bharat Petroleum Corporation Limited - No adjustments are made to reflect the fair values, or recognize new assets or liabilities. Adjustments are made to harmonise accounting policies. - The financial information in the financial statements in respect of prior periods is restated as if the business combination has occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee or is adjusted against general reserve. The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee. The difference if any, between the amounts recorded as share capital plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves. 1.3. Use of Judgements and Estimates The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets, liabilities and the accompanying disclosures along with contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of assets or liabilities affected in future periods. The Group continually evaluates these estimates and assumptions based on the most recently available information. In particular, information about significant areas of estimates and judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as below: • Assessment of functional currency; • Financial instruments; • Estimates of useful lives and residual value of Property, Plant and Equipment and Intangible assets; • Valuation of Inventories; • Measurement of recoverable amounts of Cash-Generating Units; • Measurement of Defined Benefit Obligations and actuarial assumptions; • Provisions including loss allowances; • Evaluation of recoverability of Deferred Tax Assets; • Contingencies; • Interest in Joint arrangements; • In case of BPRL, impairment of exploration and evaluation assets; key assumptions for underlying recoverable amounts; and • Estimation of Oil and Natural Gas reserves: - The determination of the Group’s estimated oil and natural gas reserves requires significant judgements and estimates to be applied and these are regularly reviewed and updated. Factors such as the availability of geological and engineering data, reservoir performance data, acquisition and divestment activity, drilling of new wells, and commodity prices all impact the determination of the Group’s estimates of its oil and natural gas reserves. The Group estimates its proved reserves with a reasonable certainty on the basis of rigorous technical and commercial assessments based on conventional industry practice and regulatory requirements.
Annual Report 2019-20 285 - Estimates of oil and natural gas reserves are used to calculate depreciation, depletion and amortization charges for the Group’s oil and gas properties. The impact of changes in estimated proved reserves is dealt with prospectively by amortizing the remaining carrying value of the asset over the expected future production. Oil and natural gas reserves also have a direct impact on the assessment of the recoverability of asset carrying values reported in the consolidated financial statements. If proved reserves estimates are revised downwards, retained earnings could be affected by changes in depreciation expense or an immediate write-down of the property’s carrying value. Revisions to accounting estimates are recognized prospectively in the Consolidated Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected. 1.4. Property, Plant and Equipment 1.4.1. Property, Plant and Equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. 1.4.2. The initial cost of an asset comprises its purchase price or construction cost (including import duties and non-refundable taxes), any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use). 1.4.3. Direct expenses incurred during construction period on capital projects are capitalized. Other expenses of the project group which are allocated to projects costing above a threshold limits are also capitalized. Expenditure incurred on enabling assets are capitalized. 1.4.4. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the group. 1.4.5. Expenditure on assets, other than plant and machinery, LPG cylinders and pressure regulators, not exceeding threshold limits are charged to revenue. 1.4.6. Spare parts which meet the definition of Property, Plant and Equipment are capitalized as Property, Plant and Equipment in case the unit value of the spare part is above the threshold limits. In other cases, the spare part is inventorized on procurement and charged to Consolidated Statement of Profit and Loss on consumption. 1.4.7. An item of Property, Plant and Equipment and any significant part initially recognized separately as part of Property, Plant and Equipment is derecognized upon disposal; or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in the Consolidated Statement of Profit and Loss when the asset is derecognized. 1.4.8. The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end and changes, if any, are accounted in the line with revisions to accounting estimates. 1.4.9. In respect of the capital goods common for both GST and non-GST products, the GST input tax credit is taken on the eligible portion based on GST and non-GST product ratio in the month of procurement and the ineligible portion is capitalized. Subsequently, this ratio is reviewed every month as per the GST provisions and the differential GST amount arising due to changes in the ratio is capitalized when beyond the materiality threshold. 1.4.10.The Group has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015).
286 Bharat Petroleum Corporation Limited 1.5. Depreciation Depreciation on Property, Plant and Equipment are provided on the straight line basis, over the estimated useful lives of assets (after retaining the estimated residual value of upto 5%). These useful lives determined are in line with the useful lives as prescribed in the Schedule II of the Act, except in following cases: 1.5.1. Plant & Machinery at Retail Outlets (other than Storage tanks and related equipments) are depreciated over a useful life of 15 years based on the technical assessment. 1.5.2. Computer equipments are depreciated over a period of 3 years and Mobile phones are depreciated over a period of 2 years based on internal assessment. Electronic and electrical equipments provided to management staff under furniture on hire scheme are depreciated over a period of 4 years as per internal assessment. Other furniture items provided to management staff are depreciated over a period of 6 years as per internal assessment. 1.5.3. Solar Panels are depreciated over a period of 25 years based on the technical assessment of useful life and applicable warranty conditions. 1.5.4. Moulds, used for the manufacturing of the packaging material for Lubricants, are depreciated over a period of 5 years based on technical assessment of useful life. 1.5.5. Items of Property, Plant and Equipment costing not more than the threshold limits are depreciated at 100 percent in the year of acquisition except LPG Cylinders and Pressure Regulators which are depreciated over a useful life of 15 years based on the technical assessment. 1.5.6. In case of BPRL, workstations are depreciated over a period of 5 years. The useful lives are estimated based on the internal assessment. 1.5.7. Components of the main asset that are significant in value and have different useful lives as compared to the main asset are depreciated over their estimated useful life. Useful life of such components has been assessed based on historical experience and internal technical assessment. 1.5.8. Depreciation on spare parts specific to an item of Property, Plant and Equipment is based on life of the related Property, Plant and Equipment. In other cases, the spare parts are depreciated over their estimated useful life based on the technical assessment. 1.5.9. Depreciation is charged on additions / deletions on pro-rata monthly basis including the month of addition / deletion. 1.5.10.The Residual value of LPG cylinders and Pressure Regulators have been estimated at 15% of the original cost (Previous year upto 5% of the original cost) based on the historical experience and internal technical assessment. 1.6. Intangible Assets 1.6.1. Goodwill: Goodwill that arises on a business combination is subsequently measured at cost less any accumulated impairment losses. In respect of business combinations that occurred prior to 1st April 2015, goodwill is included on the basis of its deemed cost, which represents the amount recorded under Previous GAAP, adjusted for the reclassification of certain intangibles. Goodwill is not amortized but is tested for impairment annually. 1.6.2. Intangible assets are carried at cost net of accumulated amortization and accumulated impairment losses, if any. Expenditure on internally generated intangibles, excluding development costs, is not capitalized and is reflected in Consolidated Statement of Profit and Loss in the period in which such expenditure is incurred. Development costs are capitalized if, and only if, technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Group has an intention and ability to complete and use or sell the asset and the costs can be measured reliably.
Annual Report 2019-20 287 1.6.3. Assets where entire output generated is committed to be sold to entities providing public services for almost entire useful life of the asset are classified as intangible assets as per the requirements of Applicable Ind AS and are amortized (after retaining the residual value, if applicable) over their useful life or the period of the agreement, whichever is lower. 1.6.4. In cases where, the Corporation or its Subsidiaries has constructed assets on behalf of public infrastructure entities and it has only a preferential right to use, these assets are classified as intangible assets and are amortized (after retaining the residual value, if applicable) over their useful life or the period of the agreement, whichever is lower. 1.6.5. Intangible assets with indefinite useful lives, such as right of way which is perpetual and absolute in nature, are not amortized, but are tested for impairment annually. The useful lives are reviewed at each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If not, the change in useful life from indefinite to finite is made on a prospective basis. The impairment losses on intangible assets with indefinite life are recognized in the Consolidated Statement of Profit and Loss. 1.6.6. Expenditure incurred for creating / acquiring other intangible assets above threshold limits from which future economic benefits will flow over a period of time, is amortized over the estimated useful life of the asset or five years, whichever is lower, on a straight line basis, from the time the intangible asset starts providing the economic benefit. In other cases, the expenditure is reflected in the Consolidated Statement of Profit and Loss in the year in which the expenditure is incurred. The amortization period and the amortization method for an intangible asset with a finite life are reviewed at each year end. The amortization expense on intangible asset with finite useful lives and impairment losses in case there is an indication that the intangible asset may be impaired, are recognized in the Consolidated Statement of Profit and Loss. 1.6.7. The Group has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its intangible assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015). 1.7. Investment Property 1.7.1. Investment property is property (land or a building or part of a building or both) held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in production or supply of goods or services or for administrative purposes. Investment properties are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. 1.7.2. Any gain or loss on disposal of investment property calculated as the difference between the net proceeds from disposal and the carrying amount of the Investment Property is recognized in Consolidated Statement of Profit and Loss. 1.7.3. On transition to Ind AS i.e. 1st April 2015, the Group has re-classified certain items from Property, Plant and Equipment to investment property. For the same, Group has elected to use the exemption available under Ind AS 101 to continue the carrying value for such assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015). 1.8. Borrowing costs 1.8.1. Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs. 1.8.2. Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged to the Consolidated Statement of Profit and Loss.
288 Bharat Petroleum Corporation Limited 1.8.3. Investment Income earned on the temporary investment of funds of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. 1.9. Non-current assets/Disposal Group held for sale 1.9.1. Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets. 1.9.2. Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell (upto 5% of the acquisition value). 1.9.3. The disposal group classified as held for sale, are measured at the lower of carrying amount and fair value less costs to sell. 1.9.4. Property, Plant and Equipment and Intangible assets classified as held for sale are not depreciated or amortized. 1.10. Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset to lessee for a period of time in exchange for consideration. Corporation and its subsidiary shall reassess whether a contract is, or contains, a lease if the terms and conditions of the contract are changed. 1.10.1. As a Lessee At the commencement date, group recognizes a right-of-use asset at cost and a lease liability at present value of the lease payments that are not paid at commencement date. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: (i) the contract involves the use of an identified asset; (ii) the Group has right to obtain substantially all of the economic benefits from use of the asset throughout the period of the lease; and (iii) the Group has the right to direct the use of the asset. The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability (at present value) adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives (at present value) except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense. Lease of items such as IT Assets (tablets, personal computers, mobiles, POS machines etc.), small items of office furniture etc. are treated as low value. The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the Corporation and its subsidiaries respective incremental borrowing rate computed on periodic basis based on lease term. Lease liabilities are re-measured with a corresponding adjustment to the related right-of-use asset if the Group changes its assessment, whether it will exercise an extension or a termination option. Right-of-use assets are depreciated over the lease term on systematic basis and Interest on lease liability is charged to Consolidated Statement of Profit and Loss as Finance cost. 1.10.2. As a Lessor A lessor shall classify each of its leases as either an operating lease or a finance lease. 1.10.2.1. Finance leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset.
Annual Report 2019-20 289 Group shall recognize assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease. 1.10.2.2. Operating leases A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. Group shall recognize lease payments from operating leases as income on systematic basis in the pattern in which benefit from the use of the underlying asset is diminished. 1.11. Impairment of Non-financial Assets 1.11.1. Non-financial assets other than inventories, deferred tax assets and non-current assets classified as held for sale are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. The recoverable amount is the higher of the asset’s or Cash-Generating Unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. 1.11.2. Goodwill arising from business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. 1.11.3. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 1.12. Inventories 1.12.1. Inventories are stated at cost or net realizable value, whichever is lower. Cost of inventories comprises of expenditure incurred in the normal course of business in bringing inventories to their present location including appropriate overheads apportioned on a reasonable and consistent basis and are determined on the following basis: - Crude oil, traded goods and finished products other than lubricants are determined on First-In-First- Out basis. - Other raw materials, packages, lubricants and stores and spares are determined on weighted average basis. - The cost of Stock-in-Process is determined at raw material cost plus cost of conversion. 1.12.2. Customs duty on Raw materials/Finished goods lying in bonded warehouse are provided for at the applicable rates except where liability to pay duty is transferred to consignee. 1.12.3. Excise duty on finished stocks lying at manufacturing locations is provided for at the assessable value applicable at each of the locations based on end use. 1.12.4. The net realizable value of finished goods and stock-in-trade are based on the inter-company transfer prices and final selling prices (applicable at the location of stock) for sale to oil marketing companies and retail consumers respectively. For the purpose of stock valuation, the proportion of sales to oil marketing companies and retail consumers are determined on all India basis and considered for stock valuation at all locations. 1.12.5. Raw Materials held for use in the production of finished goods are not written down below cost except in cases where raw material prices have declined and it is estimated that the cost of the finished goods will exceed their net realizable value. 1.12.6. Obsolete, slow moving, surplus and defective stocks are identified at the time of physical verification of stocks and where necessary, provision is made for such stocks. In case of NRL, threshold of 3 years is being used.
290 Bharat Petroleum Corporation Limited 1.12.7. In case of BPRL, finished goods of Crude Oil are valued at Cost or Net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation and depletion. The value of such inventories includes royalty (wherever applicable). Cost of inventories other than finished goods, includes expenditure incurred in the normal course of business in bringing inventories to their present location. 1.13. Revenue Recognition 1.13.1. Sale of goods Revenue from the sale of goods is recognized when the performance obligation is satisfied by transferring the related goods to the customer. The performance obligation is considered to be satisfied when the customer obtains control of the goods. Revenue from the sale of goods includes excise duty and is measured at the fair value of the consideration received or receivable (after including fair value allocations related to arrangements involving more than one performance obligation), net of returns, taxes or duties collected on behalf of the Government and applicable trade discounts or rebates. Revenue is allocated between loyalty programmes and other components of the sale. The amount allocated to the loyalty programme is deferred, and is recognized as revenue when the Corporation has fulfilled its obligation to supply the products under the terms of the programme. Any upfront fees earned by the Corporation with no identifiable performance obligation are recognized as revenue on a systematic basis over the period of the Contract. Where the Corporation acts as an agent on behalf of a third party, the associated income is recognized on a net basis. Claims in respect of subsidy on LPG and SKO, from Government of India are booked on in-principle acceptance thereof on the basis of available instructions / clarifications, subject to final adjustments as stipulated. In case of BPRL, income from the sale of crude oil and gas produced from the block until the start of commercial production is adjusted against the cost of such block. In case of BPRL, any retrospective revision in prices of crude oil and gas is accounted for in the year of such revision. 1.13.2. Construction contracts Revenue from Construction contracts arise from the service concession arrangements entered into by the Group and certain arrangements involving construction of specific assets as part of arrangements involving more than one performance obligation. Contract revenue includes the amount agreed in the contract to the extent that it is probable that they will result in revenue and can be measured reliably. Based on an assessment of the terms of such contracts, the contract revenue is recognized in the Consolidated Statement of Profit and Loss based on the percentage of completion method. The stage of completion is assessed with reference to the proportion of actual cost incurred as compared to the total estimated cost of the related contract. Contract expenses are recognized as incurred unless they create an asset relating to future contract activity. An expected loss on a contract is recognized immediately in the Consolidated Statement of Profit and Loss. 1.13.3. Interest income is recognized using Effective Interest Rate (EIR) method.
Annual Report 2019-20 291 1.13.4. Dividend is recognized when right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of dividend can be measured reliably. 1.13.5. Income from sale of scrap is accounted for on realization. 1.13.6. In case of the Corporation, claims other than subsidy claims on LPG and SKO, from Government of India are booked when there is a reasonable certainty of recovery. 1.14. Classification of Income / Expenses 1.14.1. Income / expenditure (net) in aggregate pertaining to prior year(s) above the threshold limits are corrected retrospectively in the first set of financial statements approved for issue after their discovery by restating the comparative amounts and / or restating the opening Balance Sheet for the earliest prior period presented. 1.14.2. Prepaid expenses upto threshold limits in each case, are charged to revenue as and when incurred. 1.14.3. Deposits placed with Government agencies / local authorities which are perpetual in nature are charged to revenue in the year of payment. 1.15. Employee Benefits 1.15.1. Short-term employee benefits Short-term employee benefits are recognized as an expense at an undiscounted amount in the Consolidated Statement of Profit and Loss of the year in which the related services are rendered. 1.15.2. Post-employment benefits Defined Contribution Plans: Obligations for contributions to defined contribution plans such as pension are recognized as an expense in the Consolidated Statement of Profit and Loss as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a set-off in future payments is available. Defined Benefit Plans: The net obligation in respect of defined benefit plans such as gratuity, other post-employment benefits etc., is calculated separately for each plan by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligation is performed at each reporting period end by a qualified actuary using the Projected Unit Credit method. When the calculation results in a potential asset for the entity, the recognized asset is limited to the present value of the economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. The current service cost of the defined benefit plan, recognized in the Consolidated Statement of Profit and Loss as part of employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Consolidated Statement of Profit and Loss. The net interest is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This net interest is included in employee benefit expense in the Consolidated Statement of Profit and Loss. Re-measurements which comprise of actuarial gains and losses, the return on plan assets (excluding amounts included in the net interest on the net defined benefit liability/(asset)) and the effect of the asset ceiling (if any, excluding amounts included in the net interest on the net defined benefit liability/(asset)), are recognized in other comprehensive income.
292 Bharat Petroleum Corporation Limited 1.15.3. Other long-term employee benefits Liability towards other long-term employee benefits - leave encashment and long service awards etc., are determined on actuarial valuation by qualified actuary by using Projected Unit Credit method. The current service cost of other long-terms employee benefits, recognized in the Consolidated Statement of Profit and Loss as part of employee benefit expense, reflects the increase in the obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Consolidated Statement of Profit and Loss. The interest cost is calculated by applying the discount rate to the balance of the obligation. This cost is included in employee benefit expense in the Consolidated Statement of Profit and Loss. Re-measurements are recognized in the Consolidated Statement of Profit and Loss. 1.15.4. Termination benefits Expenditure on account of Voluntary Retirement Scheme are charged to Consolidated Statement of Profit and Loss as and when incurred. 1.16. Foreign Currency Transactions 1.16.1. Monetary items Transactions in foreign currencies are initially recorded at their respective exchange rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates prevailing on the reporting date. Exchange differences arising on settlement or translation of monetary items (except for long-term foreign currency monetary items outstanding as of 31st March 2016) are recognized in Consolidated Statement of Profit and Loss either as profit or loss on foreign currency transaction and translation or as borrowing costs to the extent regarded as an adjustment to borrowing costs. The Group has elected to continue the policy adopted under Previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of 31st March 2016 i.e. foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any, accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of the liability. 1.16.2. Non – Monetary items: Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. 1.16.3. In case of group companies of BPRL, the results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: Assets and liabilities are translated at the closing rate at the date of that balance sheet. Income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and All resulting exchange differences are recognized in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognized in other comprehensive income. When a foreign operation is sold, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Annual Report 2019-20 293 Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. 1.17. Government Grants 1.17.1. Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. 1.17.2. When the grant relates to an expense item, it is recognized in Consolidated Statement of Profit and Loss on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. 1.17.3. Government grants relating to Property, Plant and Equipment are presented as deferred income and are credited to the Consolidated Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. 1.18. Provisions, Contingent Liabilities and Capital Commitments 1.18.1. Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 1.18.2. The expenses relating to a provision is presented in the Consolidated Statement of Profit and Loss net of reimbursements, if any. 1.18.3. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. 1.18.4. Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Group, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability. 1.18.5. Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. 1.18.6. Contingent liabilities and Capital Commitments disclosed are in respect of items which in each case are above the threshold limits. 1.19. Fair Value Measurement 1.19.1. The Group measures certain financial instruments at fair value at each reporting date. 1.19.2. Certain accounting policies and disclosures require the measurement of fair values, for both financial and non- financial assets and liabilities. 1.19.3. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability also reflects its non-performance risk. 1.19.4. The best estimate of the fair value of a financial instrument on initial recognition is normally the transaction price i.e. the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently that difference is recognized in Consolidated Statement of Profit and Loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.
294 Bharat Petroleum Corporation Limited 1.19.5. While measuring the fair value of an asset or liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation technique as follows: - Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. - Level 2: inputs other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices) - Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable inputs) 1.19.6. When quoted price in active market for an instrument is available, the Group measures the fair value of the instrument using that price. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. 1.19.7. If there is no quoted price in an active market, then the Group uses a valuation technique that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. 1.19.8. The Group regularly reviews significant unobservable inputs and valuation adjustments. If the third party information, such as broker quotes or pricing services, is used to measure fair values, then they assess the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. 1.20. Financial Assets 1.20.1. Initial recognition and measurement Trade Receivables and debt securities issued are initially recognized when they are originated. All other financial assets are initially recognized when the Group becomes a party to the contractual provisions of the instrument. All financial assets other than those measured subsequently at fair value through profit and loss, are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. 1.20.2. Subsequent measurement Subsequent measurement is determined with reference to the classification of the respective financial assets. Based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial asset, the Group classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit and loss. Debt instruments at amortized cost A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met: The asset is held within a business model whose objective is - To hold assets for collecting contractual cash flows, and - Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Consolidated Statement of Profit and Loss. The losses arising from impairment are recognized in the Consolidated Statement of Profit and Loss.
Annual Report 2019-20 295 Debt instruments at Fair Value through Other Comprehensive Income (FVOCI) A ‘debt instrument’ is measured at the Fair Value through Other Comprehensive Income if both the following conditions are met: The asset is held within a business model whose objective is achieved by both - collecting contractual cash flows and selling financial assets and - contractual terms of the asset give rise on specified dates to cash flows that are SPPI on the principal amount outstanding. After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment losses are recognized in the Consolidated Statement of Profit and Loss. Other net gains and losses are recognized in other comprehensive Income. Debt instruments at Fair value through Profit or Loss (FVTPL) Fair Value through Profit or Loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation at amortized cost or as FVOCI, is classified as FVTPL. After initial measurement, any fair value changes including any interest income, foreign exchange gain and losses, impairment losses and other net gains and losses are recognized in the Consolidated Statement of Profit and Loss separately. Equity investments All equity investments within the scope of Ind AS 109 are measured at fair value. Such equity instruments which are held for trading are classified as FVTPL. For all other such equity instruments, the Group decides to classify the same either as FVOCI or FVTPL. They make such election on an instrument-by- instrument basis. The classification is made on initial recognition and is irrevocable. For equity instruments classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in Other Comprehensive Income (OCI). Dividends on such equity instruments are recognized in the Consolidated Statement of Profit and Loss. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Consolidated Statement of Profit and Loss. 1.20.3. De-recognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the entity’s Balance Sheet) when The rights to receive cash flows from the asset have expired, or The rights to receive cash flows from the asset is transferred or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either: - The risks and rewards of the asset has been transferred substantially, or - The risk and rewards of the asset are neither transferred nor retained, but the control of the asset is transferred. On de-recognition, any gains or losses on all debt instruments (other than debt instruments measured at FVOCI) and equity instruments (measured at FVTPL) are recognized in the Consolidated Statement of Profit and Loss. Gains and losses in respect of debt instruments measured at FVOCI and that are accumulated in OCI are reclassified to profit or loss on de-recognition. Gains or losses on equity instruments measured at FVOCI that are recognized and accumulated in OCI are not reclassified to profit or loss on de-recognition.
296 Bharat Petroleum Corporation Limited 1.20.4. Impairment of financial assets In accordance with Ind AS 109, the Group applies Expected Credit Loss (“ECL”) model for measurement and recognition of impairment loss on the financial assets measured at amortized cost and debt instruments measured at FVOCI. Loss allowances on receivables from customers are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date. In respect of other financial assets such as loan to LPG Consumers, debt securities and bank balances, the loss allowance is measured at 12 month ECL only if there is no significant deterioration in the credit risk since initial recognition of the asset or asset is determined to have a low credit risk at the reporting date. 1.21. Financial Liabilities 1.21.1. Initial recognition and measurement Financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. Financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss, transaction costs that are directly attributable to its acquisition or issue. 1.21.2. Subsequent measurement Subsequent measurement is determined with reference to the classification of the respective financial liabilities. Financial Liabilities at Fair Value through Profit or Loss (FVTPL) A financial liability is classified as at Fair Value through Profit or Loss (FVTPL) if it is classified as held- for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognized in Consolidated Statement of Profit and Loss. Financial Liabilities at amortized cost After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortized cost using the Effective Interest Rate (“EIR”) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The amortization done using the EIR method is included as finance costs in the Consolidated Statement of Profit and Loss. 1.21.3. De-recognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Consolidated Statement of Profit and Loss. 1.22. Financial guarantees Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of the debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the fair value initially recognized less cumulative amortization.
Annual Report 2019-20 297 1.23. Derivative financial instruments The Group uses derivative financial instruments to manage the commodity price risk and exposure on account of fluctuation in interest rate and foreign exchange rates. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value with the changes being recognized in the Consolidated Statement of Profit and Loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The fair valuation gains or losses on foreign currency derivatives measured at FVTPL are grouped along with Gain or loss on foreign currency transactions and translations and presented under “Other Income” or “Other expenses”, as the case may be, since these derivatives constitute hedges from an economic perspective and may not qualify for hedge accounting under Ind AS 109. 1.24. Embedded derivatives If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109, the classification requirements contained in Ind AS 109 are applied to the entire hybrid contract. Derivatives embedded in all other host contracts, including financial liabilities are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit and loss. These embedded derivatives are measured at fair value with changes in fair value recognized in Consolidated Statement of Profit and Loss, unless designated as effective hedging instruments. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows. 1.25. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet, if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. 1.26. Taxes on Income 1.26.1. Current Tax Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the end of reporting period. Current Tax items are recognized in correlation to the underlying transaction either in the Consolidated Statement of Profit and Loss, other comprehensive income or directly in equity. 1.26.2. Deferred Tax Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.
298 Bharat Petroleum Corporation Limited Deferred tax items are recognized in correlation to the underlying transaction either in the Consolidated Statement of Profit and Loss, other comprehensive income or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax is not recognized for • Temporary differences related to investments in subsidiaries and joint ventures to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. • Taxable temporary differences arising on the initial recognition of goodwill. 1.27. Earnings per share 1.27.1. Basic earnings per share are calculated by dividing the profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period. 1.27.2. For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares. 1.28. Classification of Assets and Liabilities as Current and Non-Current All assets and liabilities are classified as current or non-current as per the normal operating cycle (considered as 12 months) and other criteria set out in Schedule III of the Act. 1.29. Cash and Cash Equivalents Cash and cash equivalents in the Balance Sheet include cash at bank, cash, cheque, draft on hand and demand deposits with an original maturity of less than three months, which are subject to an insignificant risk of changes in value. For the purpose of Consolidated Statement of Cash Flows, Cash and cash equivalents include cash at bank, cash, cheques and drafts on hand, net of outstanding bank overdrafts as they are considered an integral part of the Corporation’s cash management. The Group considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. 1.30. Cash Flows Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated. 1.31. Joint Operations in case of BPRL BPRL has Joint arrangement in the nature of Production Sharing Contracts (PSC) with the Government of respective countries and/or various bodies corporate for exploration, development and production activities. The income, expenditure, assets and liabilities of the Joint operations are merged on line by line basis according to the participating interest with the similar items in the financial statements of BPRL. 1.32. Depletion In case of BPRL, Depletion charge is calculated on the capitalized cost according to the Unit of Production Method. The Depletion Charge or The Unit of Production (UOP) charge for all costs within a cost centre is calculated by multiplying the UOP rate with the production for the period. The UOP rate for computing depreciation charge
Annual Report 2019-20 299 for the acquisition cost within a field is arrived at by dividing the acquisition cost of the field by the Proved Oil and Gas Reserves and for all other capitalized costs, by dividing the depreciation base of the cost centre by the Proved Developed Oil and Gas Reserves. The depreciation base of a cost centre includes the gross block of the cost centre and estimated site restoration expenditure and is reduced by the accumulated depreciation and accumulated impairment charge of the cost centre. The estimates of proved reserves used are based on the latest technical assessment available with the Group. 1.33. Oil and natural gas producing activities in case of BPRL BPRL follows the accounting policy as explained below for its oil and natural gas exploration and production activities. i. Acquisition costs such as costs incurred to purchase, lease or otherwise acquire a property or mineral right proved or unproved are capitalized. Any pre-acquisition costs are expensed as and when incurred. ii. All costs which are directly attributable to the exploration and evaluation activities of oil and gas are capitalized as Exploratory Wells-in-Progress under “intangible assets under development”. General and administrative costs are included in the exploration and evaluation cost only to the extent that those costs can be directly attributable to the related exploration and evaluation assets. In all other cases, these costs are expensed as incurred. iii. BPRL classifies the acquisition costs, exploration and evaluation assets as tangible asset or intangible asset according to the nature of assets acquired. iv. Once the technical feasibility and commercial viability of extracting oil and gas are determinable, exploration and evaluation assets are classified as Development Wells-in-Progress under “intangible assets under development”. Exploration and evaluation asset is assessed for impairment, and impairment loss if any, is recognized, before such reclassification. Subsequent development costs including costs incurred for production facilities are capitalized as and when incurred as intangible assets under development or intangible assets as the case may be. v. When a well within a block or cost centre is ready to commence commercial production, the capitalized costs referred above are reclassified as intangible assets. The cost centre is not normally smaller than a country, except, where warranted by a major difference in economic, fiscal or other factors in the country. vi. When a block or cost centre is relinquished, the accumulated cost is charged off as an expense in the said year. vii. BPRL capitalizes the obligations for removal and restoration that are incurred during a particular period as a consequence of having undertaken the exploration for and evaluation of mineral resources and the amount of provision required to be created for subsequent abandonment as part of Property, Plant and Equipment or Intangible Assets, as the case may be. The provision for estimated abandonment costs is made at current prices considering the environment and social obligations, terms of mining lease agreement, industry practice, etc. Where the effect of the time value of money is material, the amount of the provision is the present value of the expenditures expected to be required to settle the obligation. The discount rate (or rates) is pre-tax rate (or rates) that reflect current market assessments of the time value of money and the risks specific to the liability. Where there is an uncertainty of timing on the incurrence of the expenditure, time value of money is not considered while providing for the obligations. Changes in the measurement of existing abandonment costs that result from changes in the estimated timing or amount of the outflow of resources embodying economic benefits required to settle the obligation or a change in the discount rate is added to, or deducted from the related field in the current period and is considered for necessary depletion (depreciation) prospectively. The change in the estimated provision due to the periodic unwinding of the discount is recognized in the Consolidated Statement of Profit and Loss as it occurs.
300 Bharat Petroleum Corporation Limited viii. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The Impairment test is performed in accordance with the procedures given in para 1.11 for impairment of non-financial assets. Impairment loss, if any is recognized as an expense. ix. BPRL allocates exploration and evaluation assets to cash generating units or group of cash generating units for the purpose of assessing such assets for impairment. 1.34. The Group has adopted materiality threshold limits in the preparation and presentation of financial statements as given below:
Threshold Item Accounting Unit Threshold Policy Reference Limit Value Allocation of other expenses to projects costing in each case 1.4.3 ` Crores 5 Expenditure on certain items of Property, Plant and Equipment 1.4.5 ` 1,000 charged to revenue in each case Capitalization of spare parts meeting the definition of Property, 1.4.6 ` Lakhs 10 Plant and Equipment in each case (Note 2) GST on common capital goods per item per month 1.4.9 ` Lakhs 5 Depreciation at 100 percent in the year of acquisition except LPG 1.5.5 ` 5,000 Cylinders and Pressure Regulators Expenditure incurred for creating / acquiring other intangible 1.6.6 ` Lakhs 50 assets in each case Income / expenditure (net) in aggregate pertaining to prior year(s) 1.14.1 ` Crores Note 1 Prepaid expenses in each case (Note 2) 1.14.2 ` Lakhs 5 Disclosure of Contingent liabilities and Capital Commitments in 1.18.6 ` Lakhs 5 each case Note: 1. BPCL: ` 150 Crores; NRL: ` 10 Crores; BGRL: ` 50 Crores & BPRL: ` 150 Crores 2. BGRL: ` 1 Lakh
Annual Report 2019-20 301 - 0.80 53.74 474.46 547.85 136.60 As at 6,654.94 6,504.33 2,126.13 1,953.38 8,720.53 21,798.28 48,971.04 31/03/2019 ( ` in Crores) 0.05 58.93 605.58 535.40 154.09 As at Net Carrying Amount 7,520.74 7,160.59 2,244.40 2,145.41 6,870.54 9,131.86 23,333.51 48,971.04 59,761.10 31/03/2020 - 0.02 33.79 83.30 329.97 630.35 821.57 381.84 Up to 6,499.70 9,950.36 1,846.43 1,523.46 1,477.59 13,628.02 31/03/2020
- - - - - 9.48 1.99 6.59 12.22 61.78 17.18 12.61 285.06 345.13 Disposal Retirement / / Deductions On Account Of Reclassifications - 0.01 86.85 10.26 15.73 425.72 458.77 169.23 381.84 405.58 184.23 Year Depreciation For the 1,884.60 3,360.28 4,022.82 ------(0.03) (0.03) Transition Ind AS 116 - - 0.04 25.52 67.57 255.34 478.30 649.95 Up to 4,900.16 1,430.19 6,651.86 1,064.69 1,078.60 9,950.36 31/03/2019 0.07 92.72 935.55 237.39 As at 1,165.75 2,145.41 9,367.17 7,252.38 8,684.05 3,065.97 29,833.21 58,921.40 73,389.12 10,609.45 31/03/2020 - - - - 3.13 14.61 20.15 64.70 27.12 45.76 19.62 389.23 194.38 584.32 Disposal Retirement / / Deductions On Account Of Reclassifications ------0.01 0.26 5.59 10.26 635.31 418.83 651.43 Other No. 55) (Refer Note Adjustments Gross Block - 16.59 33.22 220.35 932.13 159.49 256.73 845.82 309.51 2,888.69 6,784.41 1,115.03 1,303.57 8,081.13 Additions ------(0.77) 6,320.25 6,319.48 Transition Ind AS 116 - 0.84 79.26 729.80 204.17 As at 7,569.02 1,026.15 1,953.38 8,085.13 9,799.13 2,776.08 26,698.44 51,912.54 58,921.40 01/04/2019 Freehold* Leasehold* Vehicles* Furniture And Fixtures* * These include assets which are given on Operating Leases or Finance Leases, the details thereof included in Note No. 50 Railway Sidings* Plant And Equipments* Previous year Right-of-use Asset (Refer Note No. 50) LPG Cylinders And Allied Equipments Particulars Office Equipments* Land (a) Buildings including Roads* (b) Total Tanks and Pipelines* Dispensing Pumps NOTE 2 PROPERTY, PLANT AND E Q UIPMENT (CONSOLIDATED)
302 Bharat Petroleum Corporation Limited NOTE 3 CAPITAL WORK-IN-PROGRESS (CONSOLIDATED)
` in Crores As at As at Particulars 31/03/2020 31/03/2019 Capital work-in-progress Property, plant and equipment under erection / construction 8,473.23 5,764.69 Capital stores including lying with contractors 920.70 949.05 Capital goods in transit 3.25 250.39
Allocation of Construction period expenses 2019-20 2018-19 Opening balance 328.77 226.10 Add: Expenditure during the year Establishment charges including 156.12 128.92 Salaries & Wages Interest 184.50 94.89 Loss / (Gain) on foreign currency 0.07 0.19 transactions Insurance 2.28 1.25 Others 9.76 12.48 681.50 463.83
Less: Allocated to assets capitalized during (130.17) (135.06) the year / charged off Closing balance pending allocation 551.33 328.77 Total 9,948.51 7,292.90
Annual Report 2019-20 303 - 0.24 0.24 As at ` in Crores 31/03/2019 0.24 0.21 32.87 32.66 As at Net Carrying Amount 31/03/2020 - 0.12 0.09 0.12 Up to 31/03/2020
- - - - disposal on account / Deductions of retirement / Reclassification - Depreciation 0.02 0.03 4.97 Crores). These fair values of the investment properties are of These fair values ` 4.97 Crores). 1.08 0.02 1.06 0.03 2018-19 ` in Crores For the year - 0.07 0.09 3.72 0.03 3.69 0.09 Up to 2019-20 31/03/2019 0.33 0.33 32.99 32.66 (Previous year 40.80 Crores (Previous As at 31/03/2020
- - - - disposal on account / Deductions of retirement / Reclassification Gross Block - - 32.66 32.66 Additions - 0.33 0.33 0.33 As at 01/04/2019 March 2020 the fair values of invesment properties are ` of March 2020 the fair values st Building Land Total Previous year The Group’s investment properties consist of office buildings and land rented out to third parties. Particulars Particulars Rental Income derived from Investment Properties Less - Depreciation Profit arising from Investment Properties before other direct expenses Information regarding Income and Expenditure of Investment Property Other direct operating expenses on the investment property are not seperately identifiable and same likely to be material. at 31 As categorised as Level 2 in the fair valuation hierarchy and has been determined by external, independent property valuers, having appropriate recognized professional qualifications and recent experience in the location category of property being valued. NOTE 4 INVESTMENT PROPERTY (CONSOLIDATED)
304 Bharat Petroleum Corporation Limited
50.22 29.64 50.60 25.81 28.41 50.77 108.11 343.56 As at ` in Crores 31/03/2019 37.93 36.53 47.05 23.09 27.55 343.56 380.60 102.83 105.62 As at Net Carrying Amount 31/03/2020 - (Previous year: 594 Crores (Previous 2.97 9.43 ` 63.26 46.07 16.13 230.94 308.36 170.50 Up to 31/03/2020
------0.01 0.39 0.39 / Deletions Reclassification - Amortization 9.74 3.73 2.33 2.85 68.33 77.81 year 17.00 42.16 For the - 1.03 6.58 46.26 36.33 12.40 162.62 230.94 128.34 Up to 31/03/2019 82.60 63.18 26.06 36.98 688.96 574.50 101.19 273.33 105.62 As at 396.62 31/03/2020 6,361.59
As at 7,411.61 7,808.23 ` in Crores - - - - - 31/03/20 0.25 0.05 0.78 0.83 - 129.74 Crores). Out of the above, an amount of Out of the above, March 2019 ` 129.74 Crores). 0.01 0.74 0.01 / Deletions st Reclassification asset / ------deletions 0.03 as intangible Capitalization Gross Block Other adjustments Gross Amount 33.53 - 974.06 1,413.12 1,446.65 4.71 0.18 1.99 Additions 36.88 16.68 54.85 133.74 115.29 Additions (as at 31 741.86 Crores (as 96.48 65.97 63.00 26.84 34.99 50.77 440.98 574.50 236.45 As at 363.10 5,998.49 5,388.27 As at 6,361.59 01/04/2019 01/04/19 Life Useful Years) (No. of Upto 5 Upto 5 20 Upto 30 Upto 30 Indefinite ` 0.82 Crores ) has been recognized in the statement of profit and loss respect group for FY 2019-20 towards impairment six blocks. Net of provision for impairment ` loss Previous year Total Process Licenses Oil And Gas Assets Software / Licenses Service Concession Arrangement (Refer Note No. 49) Right to use Right Of Way Process Licenses Particulars Right Of Way Particulars Wells in Progress* Total Previous year NOTE 5 OTHER INTANGIBLE ASSETS (CONSOLIDATED) NOTE 6 INTANGIBLE ASSETS UNDER DEVELOPMENT (CONSOLIDATED) *
Annual Report 2019-20 305 Additional information in respect of Note no. 2 to 6: a) Land: i) Freehold land includes ` 429.20 Crores (Previous year ` 295.04 Crores) of the Corporation capitalized at various locations for which conveyance deeds are yet to be executed and/or mutation is pending. ii) Freehold land includes ` 2.20 Crores (Previous year ` 2.20 Crores), which is in the process of being surrendered to the Competent Authority. b) Buildings include Ownership flats having gross value of ` 42.68 Crores (Previous year ` 42.68 Crores) in proposed / existing co-operative societies and others. c) Other adjustments include capitalization of foreign exchange differences (net) of ` 619.09 Crores (Previous year ` 411.53 Crores) and borrowing costs of ` 32.34 Crores (Previous year ` 7.33 Crores). d) Freehold Land, Plant and Equipment, Tanks and Pipelines, Railway Sidings and Buildings etc. jointly owned in varying extent with other Oil Companies / Railways: Gross Block ` 580.31 Crores (Previous year ` 222.85 Crores), Cumulative Depreciation ` 57.44 Crores (Previous year ` 41.07 Crores), Net Block ` 522.87 Crores (Previous year ` 181.78 Crores). e) Certain assets forming part of Property, Plant and Equipment have been constructed by the Corporation at Railway consumer depots, having net carrying amount of ` 22.54 Crores (Previous year ` 23.96 Crores), out of which few Railway consumer depots are currently being used by other oil companies based on award of tender by Railways, net carrying amount of such assets is ` 1.92 Crores (Previous year ` 2.07 Crores). f) Charge has been created over the fixed assets of the Group, mainly Plant and Machinery at Mumbai Refinery, Kochi Refinery and NRL in regard to the borrowings– Refer Note No. 25. g) Compensation received from third parties in respect of items of Property, Plant & Equipment/ Capital work in progress that were impaired, lost or given up during the year ` 8.40 Crores (Previous year ` 92.20 Crores). h) The Group has assessed the useful life of Right of way as indefinite where the same is perpetual in nature. i) Depreciation and amortization for the year is ` 4,100.66 Crores (Previous year ` 3,428.63 Crores) from which, after reducing - i) Depreciation on decapitalization of ` 14.57 Crores (Previous year ` 9.48 Crores) ii) Depreciation on reclassification of assets of ` 3.61 Crores (Previous year ` 0.35 Crores) iii) Charged to Project ` 2.39 Crores (Previous year ` 1.03 Crores) Net Depreciation and amortization for the year charged to Profit and Loss statement is ` 4,080.09 Crores (Previous year ` 3,417.77 Crores) j) Deduction from accumulated depreciation on account of retirement/disposal during the year is ` 251.35 Crores (Previous year ` 51.96 Crores) k) The Residual value of LPG cylinders and Pressure Regulators have been revised & estimated at 15% of the original cost (Previous year upto 5% of the original cost) based on the historical experience and internal technical assessment. The impact of change in residual value has resulted in decrease in depreciation of ` 64.42 Crores for FY 2019-20.
306 Bharat Petroleum Corporation Limited NOTE 7 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD (CONSOLIDATED) Information of interest of the Corporation in its equity accounted investees:
` in Crores Particulars Note reference 31/03/2020 31/03/2019 Interest in Associates See Note (A) below 3,349.34 2,810.93 Interest in Joint Ventures See Note (B) below 18,182.77 15,277.81 Investment accounted for using equity method 21,532.11 18,088.74 [A] Interest in Associates (I) List of material Associates of the Company
Proportion of Ownership Interest S. Country of 31/03/2020 31/03/2019 Name No. Incorporation 1. Indraprastha Gas Limited (Refer Note (i)) India 22.50% 22.50% 2. Petronet LNG Limited (Refer Note (ii)) India 12.50% 12.50% Note (i) Indraprastha Gas Limited (IGL) was set up in December, 1998 for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. The paid up share capital of the Company is ` 140 Crores (Previous year ` 140 Crores). BPCL invested ` 31.50 Crores in IGL for 22.5% stake in its equity. IGL is a listed Company with the public holding 55% of the paid up share capital of the Company. Note (ii) Petronet LNG Limited (PLL) was formed in April, 1998 for importing LNG and setting up LNG terminals with facilities like jetty, storage, regasification etc. to supply Natural Gas to various industries in the country. The paid up capital of the company is ` 1500 Crores (Previous year ` 1500 Crores). PLL was promoted by four public sector companies viz. BPCL, Indian Oil Corporation Limited (IOC), Oil and Natural Gas Limited (ONGC) and GAIL (India) Limited (GAIL). Each of the promoters holds 12.5% of the equity capital of PLL. PLL is a listed Company. BPCL’s equity investment in PLL currently stands at ` 98.75 Crores. Fair Value of material listed Associates
` in Crores S. 31/03/2020 31/03/2019 Name No. 1. Indraprastha Gas Limited 6,124.40 4,795.89 2. Petronet LNG Limited 3,747.19 4,696.88 In respect of Petronet LNG Limited, the same has been classified as an associate, as the Corporation has the right to nominate a director on the Board of Directors of the company and this right allows the Corporation to participate in financial and operating policies.
Annual Report 2019-20 307 NOTE 7 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD (CONSOLIDATED) (Contd.)
The following table comprises the financial information of the Corporation’s material Associates (in which corporation is having significant value of investments) and their respective carrying amount.
` in Crores Indraprastha Petronet LNG 31/03/2020 Gas Limited Limited Summarized financial information Non-current Assets 5,024.09 11,773.94 Current Assets (excluding cash and cash equivalent) 1,841.44 6,171.16 Cash and cash equivalent 663.55 976.02 Less: Non-current liabilities (excluding trade and other payables and provisions) 390.00 5,367.93 Trade and other payables and provisions (Non-current) 23.47 15.87 Current liabilities (excluding trade and other payables and provisions) 1,294.21 1,185.18 Trade and other payables and provisions (Current) 453.23 1,170.92 Net Assets 5,368.17 11,181.22
Group’s share of net assets 1,207.84 1,397.65
Carrying amount of interest in Associate 1,207.84 1,397.65
Revenue (including Interest Income) 7,309.10 35,920.70 Depreciation and Amortization 252.25 776.13 Other Expense 5,609.90 31,552.11 Finance Cost 8.17 403.19 Share of Profit of equity accounted investees (JV), net of tax 132.43 4.59 Profit before tax 1,571.21 3,193.86 Tax Expense 312.01 432.94 Profit after tax 1,259.20 2,760.92 Other Comprehensive Income (1.50) (0.08) Total Comprehensive Income 1,257.70 2,760.84
Group's share of Profit 283.32 345.12 Group's share of OCI (0.34) (0.01) Group's share of Total Comprehensive Income 282.98 345.11 Add/(Less): Intra Group Eliminations (8.38) (38.77) Group's share of Total Comprehensive Income (after elimination) 274.60 306.34
Dividend received from the Associate 37.80 187.51
308 Bharat Petroleum Corporation Limited NOTE 7 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD (CONSOLIDATED) (Contd.)
` in Crores Indraprastha Petronet LNG 31/03/2019 Gas Limited Limited Summarized financial information Non-current Assets 3,940.91 9,287.54 Current Assets (excluding cash and cash equivalent) 2,163.25 5,735.22 Cash and cash equivalent 71.15 226.58 Less: Non-current liabilities (excluding trade and other payables and provisions) 316.43 2,523.32 Trade and other payables and provisions (Non-current) 19.55 11.08 Current liabilities (excluding trade and other payables and provisions) 1,046.99 1,172.37 Trade and other payables and provisions (Current) 486.30 1,311.99 Net Assets 4,306.04 10,230.58
Group's share of net assets 968.86 1,278.82
Carrying amount of interest in Associate 968.86 1,278.82
Revenue (including Interest Income) 6,482.22 38,841.22 Depreciation and Amortization 201.07 411.24 Other Expense 5,101.56 35,101.98 Finance Cost 2.27 98.92 Share of Profit of equity accounted investees (JV), net of tax 91.59 79.63 Profit before tax 1,268.91 3,308.71 Tax Expense 431.84 1,078.15 Profit after tax 837.07 2,230.56 Other Comprehensive Income (0.94) (2.03) Total Comprehensive Income 836.13 2,228.53
Group's share of Profit 188.34 278.82 Group's share of OCI (0.21) (0.25) Group's share of Total Comprehensive Income 188.13 278.57 Add/(Less): Intra Group Eliminations (6.47) (38.54) Group's share of Total Comprehensive Income (after elimination) 181.66 240.03
Dividend received from the Associate 31.50 187.50 (II) Details of other Associates ` in Crores Particulars 31/03/2020 31/03/2019 Aggregate carrying amount of its interest in Associates 743.85 563.25 Share of Total Comprehensive Income from Associates during the year 133.74 (12.39) [B] Interest in Joint Ventures (I) List of material Joint Ventures of the Group Proportion of Ownership Interest S. Country of 31/03/2020 31/03/2019 Name No. Incorporation 1 Bharat Oman Refineries Limited (Refer Note (i)) India 63.38% 50.00% Note (i) Bharat Oman Refineries Limited is incorporated with joint control of BPCL & Oman Oil Company S.A.O.C. (OOC). BPCL has an equity stake of 63.38% (Previous year 50%) and OOC has equity stake of 36.62% (Previous year 50%) in BORL’s paid up share capital of ` 2,426.83 Crores as on 31st March, 2020 (Previous
Annual Report 2019-20 309 NOTE 7 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD (CONSOLIDATED) (Contd.) year ` 1,777.23 Crores). BPCL has also subscribed to Share Warrants of BORL of ` 935.68 Crores as on 31st March, 2020 (Previous year ` 1,585.68 Crores) and Compulsorily Convertible Debentures of ` 1000 Crores (Previous year ` 1000 Crores). The following table comprises the financial information of the Corporation’s material Joint Venture (in which corporation is having significant value of investments) and their respective carrying amount. ` in Crores Bharat Oman Refineries Limited 31/03/2020 31/03/2019 Summarized financial information Non-current Assets 12,498.13 12,139.68 Current Assets (excluding cash and cash equivalent) 3,557.49 6,399.72 Cash and cash equivalent 71.70 1.30 Non-current liabilities (excluding trade and other payables and provisions) 7,506.91 8,715.63 Trade and other payables and provisions (Non-current) 20.03 11.64 Current liabilities (excluding trade and other payables and provisions) 2,353.25 2,797.10 Trade and other payables and provisions (Current) 2,629.50 2,591.52 Net Assets 3,617.63 4,424.81
Group’s share of net assets 2,292.85 2,212.41
Adjustments Impact on conversion of share warrants to equity shares 103.26 - Investment in Share Warrants 325.60 779.39 Investment in Compulsorily Convertible Debentures 366.20 500.00 Inter-company profit eliminations (139.36) (148.08)
Carrying amount of interest in Joint Ventures 2,948.55 3,343.72
Revenue (excluding interest income) 42,006.54 31,641.05 Interest Income 6.88 2.65 Depreciation and Amortization 717.92 619.98 Finance Cost 712.04 653.68 Other Expense 41,800.94 30,199.75 Profit before tax (1,217.48) 170.29 Tax Expense (413.98) 63.58 Profit after Tax (803.50) 106.71 Other Comprehensive Income (3.68) 0.08 Total Comprehensive Income (807.18) 106.79
Group's share of Profit (401.75) 53.36 Group's share of OCI (1.84) 0.04 Group's share of Total Comprehensive Income (403.59) 53.40 Add/(Less): Intra Group Eliminations 8.72 8.72 Group's share of Total Comprehensive Income (after elimination) (394.87) 62.12
Dividend received from the Joint Venture - - (II) Details of Other Joint Ventures ` in Crores Particulars 31/03/2020 31/03/2019 Aggregate carrying amount of its interest in Joint Ventures 15,234.22 11,934.09 Share of Total Comprehensive Income from Joint Ventures during the year 1,849.46 (810.42)
310 Bharat Petroleum Corporation Limited NOTE 8 INVESTMENTS (CONSOLIDATED) ` in Crores No. of Units No. of Units As at As at Particulars 31/03/2020 31/03/2019 31/03/2020 31/03/2019 Investment in equity instruments designated at Fair value through Other Comprehensive income Equity Shares of ` 10 each (Fully Paid up) Quoted Oil India Limited * 2,67,50,550 2,67,50,550 221.23 495.82 Unquoted Cochin International Airport Limited * 1,31,25,000 1,31,25,000 66.62 114.30
Investments at Amortized Cost Investment in government securities - 408.95
Investment in Debentures at Amortized cost Unquoted 5% Debentures (Fully Paid up) of East 1 1 0.01 0.01 India Clinic Limited
Investment in Equity Instruments at Fair Value Through Profit or Loss Unquoted Equity Shares of Kochi Refineries 500 500 # # Employees Consumer Co-operative Society Limited (Fully paid up) # Value ` 5,000 Ordinary Shares (Fully paid up) of 6 6 ## ## Sindhu Resettlement Corporation Limited ## Value ` 19,000
Total 287.86 1,019.08 Aggregate amount of Unquoted Securities 66.63 114.31 Aggregate amount of Quoted Securities 221.23 904.77 Market value of Quoted Securities 221.23 904.77 * The Corporation has designated these investments at Fair Value through Other Comprehensive Income because these investments represent the investments that the Corporation intends to hold for long-term purposes. No such investments were disposed off during the year and accordingly, there have been no transfers of the cumulative gains or losses on these investments.
Annual Report 2019-20 311 NOTE 9 LOANS (CONSOLIDATED) (Unsecured, considered good unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Security deposits Considered good 117.23 134.79 Credit Impaired 0.98 0.59 Less : Provision for doubtful (0.98) (0.59) Loans to Joint Ventures IBV (Brasil) Petroleo Ltda. 1,900.92 1,803.37 TAAS India Pte Ltd. - 148.67 Bharat Oman Refineries Limited 1,254.10 1,254.10 Loan to Empresa Nacional de Hidrocarbonetos(Mozambique) 153.99 - Loans to employees (including accrued interest) (secured) [Refer Note No. 53] 467.01 433.96 Loans to Others Considered good* 1,094.02 54.32 Credit Impaired 1.90 2.08 Less : Allowance for doubtful loans (1.90) (2.08) Total 4,987.27 3,829.21
* The balance as at 31st March 2020 includes ` 1,022.27 Crores pertaining to Loans given to Consumers under Pradhan Mantri Ujjwala Yojana scheme. Effective 01st August 2019, the recovery period on these loans has been deferred for one year. [Refer Note No. 18] NOTE 10 OTHER FINANCIAL ASSETS (CONSOLIDATED) (Unsecured, considered good unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Claims Considered good 12.58 18.16 Considered doubtful 22.38 18.34 Less : Allowances for doubtful (22.38) (18.34) Bank deposits with more than twelve months maturity Considered Good * 14.66 34.59 Considered Doubtful 0.02 0.02 Less : Allowance for doubtful (0.02) (0.02) Advances against Equity to Joint Ventures # Assam Bio Refinery (P) Ltd. - 20.00 Bharat Renewable Energy Limited 0.54 0.54 Less : Allowance for doubtful (0.54) (0.54) Advances against Equity to Subsidiary # Investment in subsidiary@ - 13.77 Total 27.24 86.52
* Includes deposits of ` 3.87 Crores (Previous year ` 0.99 Crores) that have been pledged / deposited with local authorities. # Advance against equity shares (pending allotment). @ It represents investments made after the end of the financial period of subsidiary. The amount is remaining unadjusted due to different financial periods followed by the parent and subsidiary.
312 Bharat Petroleum Corporation Limited NOTE 11 INCOME TAX ASSETS (NET) (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advance payment of Income Tax (Net of provision) 1,381.25 449.40 Total 1,381.25 449.40 NOTE 12 OTHER NON-CURRENT ASSETS (CONSOLIDATED) (Unsecured, considered good unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Capital advances 202.20 138.29 Advance to Associates Petronet LNG Limited 124.90 143.87 Advance to Employee Benefit Trusts 190.36 - Prepaid expenses 376.64 907.72 Claims and Deposits Considered good 567.09 512.30 Considered doubtful 140.57 139.69 Less : Allowance for doubtful (140.57) (139.69) Total 1,461.19 1,702.18 NOTE 13 INVENTORIES (CONSOLIDATED) [Refer Note No. 1.12] ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Raw Materials 3,408.50 4,096.79 [Including in transit ` 1,206.52 Crores (Previous year ` 1,245.76 Crores)] Work-in-progress 1,011.52 1,254.44 Finished goods 11,264.79 10,642.26 Stock-in-Trade 5,545.15 6,107.07 [Including in transit ` 1,040.59 Crores (Previous year ` 682.22 Crores)] Stores and Spares 992.31 812.60 [Including in transit ` 8.38 Crores (Previous year ` 7.43 Crores)] Packaging material 20.33 21.71 Total 22,242.60 22,934.87
The write-down of inventories to net realizable value during the year amounted to ` 1,310.35 Crores (Previous year ` 73.14 Crores). The reversal of write downs during the year amounted to ` 0.36 lacs (Previous year ` 21.83 Crores) due to increase in net realizable value of the inventories. The write downs and reversal have been adjusted in cost of materials consumed or changes in inventories of finished goods, stock-in-trade and work-in-progress and have been grouped under exceptional item for the current year. Inventories pledged as collateral - Refer Note No. 30
Annual Report 2019-20 313 NOTE 14 INVESTMENTS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Investments at Fair value through Profit and Loss Investment in Government Securities of Face Value Of ` 100 each (Fully Paid up) Quoted 6.35% Oil Marketing Companies GOI Special Bonds 2024 2,133.15 2,020.57 6.90% Oil Marketing Companies GOI Special Bonds 2026 # 1,696.86 1,922.94 7.95% Oil Marketing Companies GOI Special Bonds 2025 11.51 11.02 8.20% Oil Marketing Companies GOI Special Bonds 2024 968.48 930.41 7.59% Government Stock 2026 # 398.54 190.95 5,208.54 5,075.89 Investments in Mutual Funds Quoted Investment in Mutual Funds - 97.97 Investments at Amortized Cost Quoted Investment in T-Bills and Government security - 625.23 Total 5,208.54 5,799.09 Aggregate amount of Unquoted Securities - - Aggregate amount of Quoted Securities 5,208.54 5,799.09 Market value of Quoted Securities 5,208.54 5,799.09 Aggregate amount of Impairment in the value of investments - - # Kept as Collateral Security with Clearing Corporation of India Limited for borrowing in Triparty Repo Settlement System of Face Value ` 1,220 Crores (Previous year ` 1,385 Crores) (Refer Note No. 30) NOTE 15 TRADE RECEIVABLES (CONSOLIDATED) (Unsecured unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Considered good* 5,570.92 7,081.09 Less : Loss allowance (192.90) (174.84) Total 5,378.02 6,906.25 * Includes debts secured by Bank guarantee/Letter of Credit/Deposit ` 513.36 Crores (Previous year ` 566.66 Crores). Trade receivables pledged as collateral (Refer Note No. 30)
314 Bharat Petroleum Corporation Limited NOTE 16 CASH AND CASH EQUIVALENTS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Balance with Banks On Current Account 323.06 179.08 Deposits with banks with original maturity of less than three months 464.34 177.20 Cheques and drafts on hand 6.10 24.70 Cash on hand 6.13 33.27 Total 799.63 414.25
NOTE 17 BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Fixed deposits with banks with original maturity of 3 - 12 months* 328.25 227.78 Earmarked Balances Unpaid Dividend 16.98 16.61 Others 19.98 3.88 Total 365.21 248.27 * It includes bid bonds of BPRL with government authorities in respect of bidding of DSF blocks of ` 0.12 Crores (Previous year ` 0.31 Crores), margin money with bank against bank guarantee given to government authorities towards bidding/ MWP in respect of Oil & Gas blocks of ` 44.73 Crores (Previous year ` 21.39 Crores) and accrued interest thereon (net of TDS) of ` 0.96 Crores (Previous year ` 0.76 Crores). It also includes deposits of Corporation ` 0.53 Crores (Previous year ` 0.31 Crores) that has been pledged / deposited with Local Authorities/Court. * Term deposit of NRL of ` 221.00 Crores hypothecated with State Bank of India as security for Overdraft facility
NOTE 18 LOANS (CONSOLIDATED) (Unsecured,considered good unless otherwise stated) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Loans to employees (including accrued interest) (secured)[Refer Note No. 53] 80.98 75.30 Loan to JVCs Vankor India Pte Ltd. - 43.21 TAAS India Pte Ltd. 94.12 - Security and other deposits 7.46 3.42 Loans to Others* Considered good 535.83 1,649.22 Significant increase in credit risk 65.52 151.72 Credit impaired 19.20 6.70 Less : Allowance for doubtful (98.25) (244.86) Total 704.86 1,684.71
* Includes ` 588.81 Crores (Previous year `1,792.70 Crores) pertaining to Loans given to Consumers under Pradhan Mantri Ujjwala Yojana scheme. Effective 01st August 2019, the recovery period on these loans has been deferred for one year. [Refer Note No. 9].
Annual Report 2019-20 315 NOTE 19 OTHER FINANCIAL ASSETS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Bank deposits with remaining maturity of less than twelve months - 10.95 Interest accrued on bank deposits etc. Considered good 13.43 27.52 Considered doubtful 0.02 0.02 Less: Allowance for doubtful (0.02) (0.02) Interest accrued on loans to related parties 25.40 25.38 Derivative Asset 15.83 23.72 Receivable from Central Government / State Government Considered good 6,020.85 8,651.69 Considered doubtful 86.13 143.51 Less: Allowance for doubtful (86.13) (143.51) Dues from Related Parties Dues from Joint Venture Companies 22.36 14.76 Advances and Recoverables Considered good 642.78 683.63 Considered doubtful 135.93 96.63 Less : Allowance for doubtful (135.93) (96.63) Total 6,740.65 9,437.65
NOTE 20 CURRENT TAX ASSETS (NET) (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advance Income Tax (Net of provision for taxation) 137.09 33.17 Total 137.09 33.17
NOTE 21 OTHER CURRENT ASSETS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advances other than Capital advances Other Advances including Prepaid expenses Considered Good 522.17 248.54 Considered doubtful 20.15 21.41 Less : Allowance for doubtful (20.15) (21.41) Claims Considered good 314.54 317.43 Considered Doubtful 0.07 2.15 Less : Allowance for doubtful (0.07) (2.15) Recoverables with Customs, Excise etc. 817.37 743.64 Total 1,654.08 1,309.61
316 Bharat Petroleum Corporation Limited NOTE 22 ASSETS HELD FOR SALE (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Assets Held for Sale * 21.07 13.78 Total 21.07 13.78 * Non-current assets held for sale consists of items such as Plant and equipment, Dispensing pumps, etc. which have been identified for disposal due to replacement / obsolescence of assets which happens in the normal course of business. These assets are expected to be disposed off within the next twelve months. On account of re-classification of these assets, an impairment loss of ` 53.26 Crores during the year (Previous year ` 7.67 Crores) has been recognized in the statement of profit and loss of the Corporation. Note 23 EQUITY SHARE CAPITAL (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 i. Authorized* 2,63,50,00,000 equity shares 2,635.00 2,635.00 (Previous year 2,63,50,00,000 equity shares) ii. Issued, subscribed and paid-up 2,16,92,52,744 (Previous year 2,16,92,52,744) equity shares fully paid-up 2,169.25 2,169.25 Less - BPCL Trust for Investment in Shares (Refer Note No. 46) (202.37) (202.37) Total 1,966.88 1,966.88 * Pursuant to Merger with Petronet CCK Limited , the authorized capital has been increased to ` 2,635 Crores from ` 2,500 Crores during Previous year. iii. The Corporation has only one class of shares namely equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per equity share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of equity shares held. The Corporation declares and pays dividend in Indian Rupees. The final dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. iv. During the Financial year 2017-18, the Corporation has issued Bonus Shares in the ratio of 1:2 by capitalization of General Reserves. The total number of shares issued is 72,30,84,248 having face value of ` 10 each. During the Financial year 2016-17, the Corporation has issued Bonus Shares in the ratio of 1:1 by capitalization of General Reserves. The total number of shares issued is 72,30,84,248 having face value of ` 10 each. v. Reconciliation of No. of Equity Shares As at As at 31/03/2020 31/03/2019 A. Opening Balance 2,16,92,52,744 2,16,92,52,744 B. Shares Issued - Bonus Shares - - C. Shares Bought Back - - D. Closing Balance 2,16,92,52,744 2,16,92,52,744
Annual Report 2019-20 317 Note 23 EQUITY SHARE CAPITAL (CONSOLIDATED) (Contd.) vi. Details of Shareholders holding more than 5% shares As at 31/03/2020 As at 31/03/2019 Name of Shareholder % Holding No. of shares % Holding No. of shares Government of India 52.98 1,14,91,83,592 53.29 1,15,60,95,962 BPCL Trust for Investment in Shares 9.33 20,23,72,422 9.33 20,23,72,422 (Refer Note No. 46) Life Insurance Corporation of India 5.58 12,10,58,023 5.88 12,74,97,778
NOTE 24 OTHER EQUITY (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Attributable to owners of the corporation Capital Reserve 73.05 72.99 Capital Reserve on Acquisition of Subsidiaries, JVCs and Associates (31.00) (31.00) Debenture Redemption Reserve 1,095.12 1,179.31 General Reserve 32,797.15 31,395.55 Foreign Currency Monetary Item Translation Difference Account - (29.34) Equity Instruments through Other Comprehensive Income (297.52) 15.41 Retained Earnings (352.84) 4,033.06 Foreign Currency Translation Reserve 1,488.44 368.81 Securities Premium Reserve 249.79 249.79 BPCL Trust for Investment in Shares (Refer Note No. 46) (456.74) (456.74) Total 34,565.45 36,797.84
Capital Reserve Opening balance 72.99 72.99 Opening balance adjustment 0.06 - Closing balance 73.05 72.99
Capital Reserve on Acquisition of Subsidiaries, JVCs and Associates Opening balance (31.00) (31.00) Additions / (Deletions) during the year - - Closing balance (31.00) (31.00)
Debenture Redemption Reserve Opening balance 1,179.31 1,132.94 Add : Transfer from Retained Earnings 293.21 295.91 Less: Transfer to Retained Earnings on redemption of debentures - (5.62) Less: Transfer to General Reserve (377.40) (243.92) Closing balance 1,095.12 1,179.31
Foreign Currency Translation Reserve Opening balance 368.81 1,341.26 Additions / (Deletions) during the year 1,119.63 (972.45) Closing balance 1,488.44 368.81
318 Bharat Petroleum Corporation Limited NOTE 24 OTHER EQUITY (CONSOLIDATED) (Contd.) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Foreign Currency Monetary Item Translation Difference Account (Refer Note No. 55) Opening balance (29.34) 66.76 Additions / (Deletions) during the year (51.62) (162.82) Additions / (Deletions) on account of Amortization during the year 80.96 66.72 Closing balance - (29.34) Securities Premium Reserve Opening balance 249.79 249.79 Additions / (Deletions) during the year - - Closing balance 249.79 249.79 Equity instruments through Other Comprehensive Income Opening balance 15.41 78.99 Additions / (Deletions) during the year (312.93) (63.58) Closing balance (297.52) 15.41 BPCL Trust for Investment in Shares (Refer Note No. 46) Opening balance (456.74) (456.74) Additions / (Deletions) during the year - - Closing balance (456.74) (456.74) General Reserve Opening balance 31,395.55 28,651.63 Add : Transfer from Retained Earnings 1,024.20 2,500.00 Add : Transfer from Debenture Redemption Reserve 377.40 243.92 Closing balance 32,797.15 31,395.55 Retained Earnings Opening balance 4,033.06 3,545.07 Opening balance adjustment (11.35) - Less: Transfer to Deferred Income on account of implementation of Ind AS 115 (net of tax) - (44.85) Opening balance after the above effect 4,021.71 3,500.22 Add : Profit/(Loss) for the year as per Statement of Profit and Loss 3,055.36 7,802.30 Add : Income from BPCL Trust for Investment in Shares (Refer Note No. 46) 495.81 364.27 Less : Interim Dividends for the year: ` 16.50 per share (Previous year `11 per share) (3,579.27) (2,386.18) Less : Dividend Distribution Tax on Interim Dividends for the year (735.73) (490.48) Less : Final Dividend for FY 2018-19 ` 8 per share (Previous year `7 per share) (1,735.40) (1,518.48) Less : Dividend Distribution Tax on Final Dividend for Previous year (355.50) (311.28) Less : Remeasurements of defined benefit plans (net of tax) (206.86) (137.02) Less : Transfer to Debenture Redemption Reserve (293.21) (295.91) Add: Dividend Distribution tax pertaining to Previous years 4.45 - Add: Transfer from Debenture Redemption Reserve - 5.62 Less : Transfer to General Reserve (1,024.20) (2,500.00) Closing balance* (352.84) 4,033.06 Total Other Equity attributable to owners 34,565.45 36,797.84 * The balance includes accumulated gain/(loss) on account of Remeasurements of defined benefit plans (Net of tax) as on 31st March 2020 ` (442.62) Crores [Previous year ` (257.56) Crores] of the corporation
Annual Report 2019-20 319 NOTE 24 OTHER EQUITY (CONSOLIDATED) (Contd.) Nature and purpose of Reserves Capital Reserve It represents capital reserve appearing in the financial statements of erstwhile Kochi Refineries Limited (KRL) transferred on amalgamation and difference between the investment made in Petronet CCK Limited (PCCKL) and the share capital received during the acquisition when the first time control is obtained . Debenture Redemption Reserve Debenture redemption reserve represents reserve created out of the profits of the Corporation available for distribution to shareholders which is utilized for redemption of debentures/bonds. General Reserve General reserve represents appropriation of retained earnings and are available for distribution to shareholders. Foreign Currency Monetary Item Translation Difference Account Foreign Currency Monetary Item Translation Difference Account represents amounts recognized on account of translation of long term foreign currency denominated borrowings not related to acquisition of depreciable assets. Amounts so recognized are amortized in the statement of profit and loss over remaining maturity of related borrowings. Retained Earnings Retained Earnings (excluding accumulated balance of remeasurements of defined benefit plans (net of tax)) represents surplus/accumulated earnings of the Group and are available for distribution to shareholders. Capital Reserve on Acquisition of Subsidiaries, JVCs and Associates Capital Reserve on Acquisition of subsidiaries, JVCs and associates represents capital reserve recognized on account on first time acquisition of a subsidiary and obtaining control of a JV. Securities Premium Securities Premium represents additional amount received by associates over and above paid up amount by the JVCs/associates. Foreign Currency Translation Reserve Foreign Currency Translation Reserve represents Exchange differences arising on translation of foreign operations which are recognized in other comprehensive income as described in accounting policies and accumulated in separate reserves within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed. ` in Crores Proposed Dividends on Equity Shares not recognized by the Corporation: 2019-20 2018-19 Final Dividend for the year [Nil (Previous year ` 8 per share)] - 1,735.40 Dividend Distribution Tax on Proposed Dividend - 356.72 Total - 2,092.12
320 Bharat Petroleum Corporation Limited NOTE 25 BORROWINGS (CONSOLIDATED)
` in Crores Particulars As at 31/03/2020 As at 31/03/2019 Current # Non-Current Current # Non-Current Secured From Banks External Commercial Borrowings ## - - 34.59 - From Others Debentures 7.35% Secured Non-Convertible Debentures 2022 * - 549.92 - 549.88 Term Loan Loan from Oil Industry Development Board ** 397.56 789.75 499.44 859.06 Unsecured From Banks Foreign Currency Loan Syndicated 3,241.29 5,622.90 - 8,108.55 Term Loan 33.35 13,760.55 - 8,508.73 From Others Debentures 7.69% Unsecured Non-Convertible Debentures 2023 - 749.80 - 749.73 8.02% Unsecured Non-Convertible Debentures 2024 - 999.76 - 999.71 Bonds 4% US Dollar International Bonds 2025 - 3,748.49 - 3,436.12 4.625% US Dollar International Bonds 2022 - 3,760.46 - 3,447.27 3% Swiss franc International Bonds 2019 - - 1,390.54 - 4.375% US Dollar International Bonds 2022 - 3,762.34 - 3,448.98 4.375% US Dollar International Bonds 2027 - 4,268.16 - 4,178.28 Term Loan Interest Free Loan from Govt. of Kerala - 31.76 - 29.27 Lease obligation (Refer Note No. 50) 155.12 5,809.18 - - Total 3,827.32 43,853.07 1,924.57 34,315.58
Terms of Repayment Schedule of Long-term borrowings as at 31/03/2020: Non-Current Interest Rate ` in Crores Maturity Interest Free loan from Govt. of Kerala 0% 100.00 30-Mar-34 Bonds 4.38% 4,276.44 2026-27 4% US Dollar International Bonds 2025 4.00% 3,769.30 8-May-25 Term Loan from Banks 3M LIBOR+ Margin 753.86 2025-26 Loan from Oil Industry Development Board - Secured 7.00% 82.06 26-Jul-24 Term Loan from Banks 3M LIBOR+ Margin 2,223.88 2024-25 Term Loan MCLR based 366.60 15-Mar-24 8.02% Unsecured Non-Convertible Debentures 2024 8.02% 1,000.00 11-Mar-24 Foreign Currency Loans USD 450 Million - Syndicated LIBOR based 3,392.37 11-Jan-24 Foreign Currency Loans USD 300 Million - Syndicated LIBOR based 2,261.58 5-Dec-23 Loan from Oil Industry Development Board - Secured 7.00%-7.22% 207.06 Jul 23 to Mar 24 Term Loan from Banks 3M LIBOR+ Margin 1,696.18 2023-24 Term Loan MCLR based 33.35 15-Apr-23 7.69% Unsecured Non-Convertible Debentures 2023 7.69% 750.00 16-Jan-23 4.625% US Dollar International Bonds 2022 4.625% 3,769.30 25-Oct-22
Annual Report 2019-20 321 NOTE 25 BORROWINGS (CONSOLIDATED) (Contd.)
Non-Current Interest Rate ` in Crores Maturity Loan from Oil Industry Development Board - Secured 7.00%-7.22% 207.06 Jul 22 to Mar 23 Term Loan from Banks 3M LIBOR+ Margin 7,099.98 2022-23 Term Loan SBI MCLR 33.35 15-Apr-22 7.35% Secured Non-Convertible Debentures 2022 7.35% 550.00 10-Mar-22 4.375% US Dollar International Bonds 2022 4.375% 3,769.30 24-Jan-22 Loan from Oil Industry Development Board - Secured 7.00% - 8.07% 293.56 July 21 to Mar 22 Term Loan SBI MCLR 33.35 15-Apr-21 Term Loan from Banks 3M LIBOR+ Margin 1,696.18 2021-22
Current Interest Rate ` in Crores Maturity Foreign Currency Loans USD 330 Million - Syndicated LIBOR based 2,487.73 26-Feb-21 Foreign Currency Loans USD 100 Million - Syndicated LIBOR based 753.86 6-Nov-20 Loan from Oil Industry Development Board - Secured 7.87% - 9.11% 397.56 July 20 to Mar 21 Term Loan MCLR based 33.35 15-Apr-20 # Classified under other financial liabilities (Refer Note No. 32) * The Corporation had allotted non-convertible 7.35% Debentures of face value of ` 550 Crores on 10th March 2017 redeemable on 10th March 2022. These were secured by first legal mortgage by way of a Registered Debenture Trust Deed over the fixed assets of the Company, mainly Plant and Machinery at Mumbai Refinery. ** These are secured by first legal mortgage over the Plant and Machinery of the Corporation, mainly Plant and Machinery at Mumbai Refinery and Kochi Refinery. NOTE 26 OTHER FINANCIAL LIABILITIES (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Security / Earnest Money Deposits 9.41 3.39 Retiral Dues 49.28 53.28 Total 58.69 56.67 NOTE 27 PROVISIONS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Provision for employee benefits [Refer Note No. 51] 1,586.67 1,518.60 Provision for abandonment for Oil and Gas Blocks [Refer Note No. 57] 9.32 19.03 Total 1,595.99 1,537.63
322 Bharat Petroleum Corporation Limited - 0.03 305.44 (99.19) (99.19) (63.58) (39.79) (39.79) 2018-19 (136.47) 3,109.18 4,377.52 1,367.53 ` in Crores ` in Crores ` in Crores (1,172.47) (1,277.89) Net of tax Net of tax - - - 7.50 21.37 80.82 21.37 73.32 629.96 (14.21) (14.49) 2019-20 Tax Tax (493.63) (136.05) (629.68) benefit benefit 2018-19 2018-19 (expense) (expense) 0.03 305.44 (61.16) (61.16) (71.08) (209.79) (1,253.29) (1,277.89) Before tax Before tax - - (2.51) 587.84 348.88 770.75 (216.35) (312.93) Net of tax Net of tax - - - - - 9.34 119.28 109.94 Tax Tax benefit benefit 2019-20 2019-20 (expense) (expense) - - (2.51) 468.56 770.75 348.88 (326.29) (322.27) Before tax Before tax Short/(Excess) provision of earlier years Current tax expense (A) Current year Subtotal of Short/(Excess) provision earlier years Amounts recognized in Profit and Loss Short/(Excess) provision of earlier years Deferred tax expense (B) Origination and reversal of temporary differences* Amounts recognized directly in Equity Temporary difference arising on account of implementation of Ind AS 115 Particulars Amounts recognized in Other Comprehensive Income Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans Particulars Tax expense recognized in the income statement (A+B) Equity instruments through Other Comprehensive income- net change in fair value Equity accounted investees - share of OCI Equity accounted investees - share of OCI Items that will be reclassified to profit or loss Exchange differences in translating financial statements of foreign operations
(a)
(c) Total
(b)
NOTE 28 TAX EXPENSE AND DEFERRED LIABILITIES (NET) (CONSOLIDATED)
Annual Report 2019-20 323 0.74 42.50 56.80 30.28 (8.55) (3.59) 169.31 (37.85) (26.25) (99.19) (256.33) 4,509.65 4,476.71 4,377.52 12,905.37 ` in Crores 2018-19 0.01% 0.33% 0.44% 1.31% 0.23% -1.99% -0.29% -0.07% -0.03% -0.20% 34.94% 34.69% % 38.10 (1.10) 267.23 221.79 615.47 (15.62) (13.21) (14.21) (260.42) (413.54) (339.20) (144.56) (629.68) 1,276.00 3,651.57 ` in Crores 2019-20 7.32% 6.07% 1.04% -7.13% -9.29% -0.03% -0.43% -0.36% -3.96% 34.94% 16.86% % -11.32% Change in Tax Rate# Others Undistributed Reserves of Associates Share of profit equity accounted investees reported net tax Proposed dividend Incremental deduction allowed for research and development costs Interest expense not deductible for tax purposes Tax losses for which no deferred income tax was recognized Tax-exempt income Tax effect of: Non-deductible tax expenses Tax using the Company’s domestic tax rate Profit before tax Adjustments recognized in current year relation to the tax of prior years Income Tax Expense # Includes BPRL International BV, Netherlands and in a tax jurisdiction Singapore Pte Ltd., Subsidiaries operates with different tax rates. introduced in the Taxation as 115BAA u/s rate the reduced tax for NRL opted & BGRL BGRL. & on BPRL being applicable rate tax lower of includes impact Also Laws (Amendment) Act, 2019. Reconciliation of effective tax rate Particulars Effective Income Tax Rate (d) N ote 28 TAX EXPENSE & DEFERRED LIABILITIES (NET) (CONSOLIDATED) (C ontd .)
324 Bharat Petroleum Corporation Limited ------0.45 3.09 0.04 3.58 asset ` in Crores Deferred tax ------(0.45) (38.63) (17.82) liability (8,573.60) (8,630.50) Deferred tax ------2.53 43.88 57.76 49.78 24.61 67.41 16.17 388.74 723.10 356.25 139.51 596.84 2,466.58 liability) off against Deferred tax Deferred tax asset (Netted - - 3.09 2.53 43.88 57.76 49.78 24.61 67.41 16.17 388.74 723.10 356.25 139.51 596.84 (38.63) (17.82) (8,573.56) (6,160.34) Net Balance ------equity directly in Recognized As at 31/03/2020 ------274.10 258.29 493.63 (38.76) Recognized in Short Excess ------9.34 109.94 119.28 in OCI Recognized 0.11 1.10 6.31 6.21 60.68 23.67 10.77 14.49 (3.59) (0.48) (4.64) 413.54 388.74 201.00 (88.77) (92.76) (56.95) (101.31) (749.14) profit or loss Recognized in - 3.57 0.94 61.35 54.42 44.79 61.10 73.12 (1.10) (8.24) 248.00 394.90 228.28 588.21 (16.80) (24.03) as at (413.54) (8,082.71) (6,787.74) 01/04/2019 Net balance Tax Assets (Liabilities) Other items Undistributed Reserves- Associates Deferred Tax on Inter-company transaction Business Loss Unabsorbed Depreciation** MAT Credit Entitlement* Other Current liabilities Provisions Proposed dividend Deferred income Employee benefits Loans and borrowings Investments Trade and other receivables Inventories Deferred tax Asset / (Liabilities) Property, plant and equipment Intangible assets Derivatives Movement in deferred tax balances Particulars (e) N ote 28 TAX EXPENSE & DEFERRED LIABILITIES (NET) (CONSOLIDATED) (C ontd .)
Annual Report 2019-20 325 ------asset 0.70 3.57 4.27 Deferred tax ` in Crores ------(1.10) (8.24) (17.50) (24.03) (413.54) liability (8,082.71) (8,547.12) Deferred tax ------0.94 54.42 61.35 44.79 61.10 73.12 228.28 394.90 248.00 588.21 1,755.11 liability) off against Deferred tax Deferred tax asset (Netted 3.57 0.94 54.42 61.35 44.79 61.10 73.12 (1.10) (8.24) 228.28 394.90 248.00 588.21 (16.80) (24.03) (413.54) (8,082.71) (6,787.74) Net Balance As at 31/03/2019 ------21.37 21.37 equity directly in Recognized ------7.50 73.32 80.82 in OCI Recognized 3.57 2.19 9.39 0.46 37.85 19.44 15.39 (3.59) (7.77) 102.91 (33.70) (42.50) (51.71) (24.12) (30.95) (432.00) (932.39) (1,367.53) profit or loss Recognized in - 0.48 64.94 34.91 30.86 51.71 53.68 68.24 (0.47) 125.37 428.60 680.00 539.01 (38.95) (39.42) as at (371.04) (7,150.32) (5,522.40) 01/04/2018 Net balance Provisions Other Current liabilities MAT Credit Entitlement* Business Loss Tax Assets (Liabilities) Proposed dividend Deferred Tax on Inter-company transaction Undistributed Reserves- Associates Other items Deferred income Trade and other receivables Loans and borrowings Employee benefits Inventories Investments Deferred tax Asset / (Liabilities) Property, plant and equipment Derivatives Intangible assets Movement in deferred tax balances Particulars (f) N ote 28 TAX EXPENSE & DEFERRED LIABILITIES (NET) (CONSOLIDATED) (C ontd .)
326 Bharat Petroleum Corporation Limited Note 28 TAX EXPENSE & DEFERRED TAX LIABILITIES (NET) (CONSOLIDATED) (Contd.) (g) As at 31st March 2020, undistributed earning of subsidiaries and equity accounted investees - share of joint ventures amounted to ` 5091.96 Crores (Previous year ` 5,051.86 Crores) on which corresponding deferred tax liability was not recognized because the Company controls the dividend policy of its subsidiaries and is able to veto the payment of dividends of its joint ventures - i.e. the Company controls the timing of reversal of the related taxable temporary differences and management is satisfied that they will not reverse in the foreseeable future. (h) As at 31st March 2020, “Undistributed Reserves- Associates” amounted to ` 2,367.75 Crores (Previous year ` 2011.86 Crores) on which the Corporation has estimated the Deferred Tax Liability (Net) amounted to NIL (Previous year ` 413.54 Crores). (i) Tax losses carried forward Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom: ` In Crores Particulars As at As at As at As at 31/03/2020 31/03/2020 31/03/2019 31/03/2019 Gross amount Expiry date Gross Amount # Expiry date Business loss - - 171.85 2019-20 Business loss 645.71 2020-21 645.71 2020-21 Business loss 68.89 2021-22 68.89 2021-22 Business loss 29.79 2022-23 29.79 2022-23 Business loss 38.34 2023-24 38.34 2023-24 Business loss 132.77 2024-25 132.77 2024-25 Business loss 166.69 2025-26 166.69 2025-26 Business loss ## 35.49 2026-27 9.82 2026-27 Business loss 105.08 2027-28 - Unadbsorbed Depreciation 7.53 No expiry date 7.53 No expiry date # The figures of Previous year have been adjusted for change in Foreign Exchange rate wherever applicable. ## Previous year figures have been restated as per tax returns filed during the year, wherever applicable. Note:- The corporation offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. * MAT credit entitlement of ` 201.00 Crores was recognized in FY 2019-20 as the corporation was liable to pay tax as per provision of Section 115JB of Income Tax Act, 1961 in the FY 2019-20. Further due to favourable judgements during FY 2019-20, MAT credit entitlement of ` 274.10 Crores has been recognized in FY 2019-20. Management is confident that it would be in a position to utilize the balance MAT credit entitlement within the period specified under the Income Tax Act, 1961. ** Corporation has unabsorbed depreciation in FY 2019-20 on which deferred tax asset of ` 388.74 Crores was recognized. Management is confident that it would be in a position to utilize the unabsorbed depreciation under the Income Tax Act, 1961. NOTE 29 OTHER NON CURRENT LIABILITIES (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Deferred Income and Others* 381.72 284.01 Total 381.72 284.01 *Deferred Income includes unamortized portion of capital grants amounting to ` 132.13 Crores (Previous year ` 141.61 Crores), comprising mainly of works contract tax reimbursement, interest free loan received from Government of Kerala as part of the fiscal incentives sanctioned for IREP and grants received for technology development.
Annual Report 2019-20 327 NOTE 30 BORROWINGS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Loans repayable on demand Secured From Banks Working capital loans / Cash Credit* 2,265.50 214.31 Foreign Currency Loans 1,206.17 - From Others Loans through Triparty Repo Settlement System (TREPS) of Clearing Corporation 999.98 1,000.00 of India Limited** Unsecured From Banks Working Capital Loan 2,405.18 0.09 Commercial Papers 1,594.33 - Foreign Currency Loans 6,460.57 1,632.44 From Others Commercial Paper 2,863.42 737.19 Loans other than repayable on demand Unsecured From Bank - 5,014.92 Total 17,795.15 8,598.95 * Secured in favour of the participating banks ranking pari passu inter-alia by hypothecation of raw materials, finished goods, work-in- progress, book debts, stores, components and spares and all movables both present and future. [Refer Note No. 13 and 15]. For NRL, Term deposit of ` 221.00 Crores from State Bank of India has been hypothecated for Overdraft facility [Refer Note No. 17] ** The Corporation has Triparty Repo Settlement System (TREPS) of Clearing Corporation of India Limited, the balance of which is ` 1,000 Crores (Previous year ` 1,000 Crores). These are secured by 6.90 % Oil Marketing Companies GOI Special Bonds 2026 & 7.59% Govt. Stock 2026 of Face Value ` 1,220 Crores (Previous year ` 1,385 Crores) [Refer Note No. 14].
NOTE 31 TRADE PAYABLES (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Total Outstanding dues of Micro Enterprises and Small Enterprises 69.20 57.04 (Refer Note No. 61) Total Outstanding dues of creditors other than Micro Enterprises and Small 13,038.01 17,777.44 Enterprises (Refer Note No. 47) Total 13,107.21 17,834.48
328 Bharat Petroleum Corporation Limited NOTE 32 OTHER FINANCIAL LIABILITIES (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Current maturities of long-term borrowings (Refer Note No. 25) 3,672.20 1,924.57 Current maturities of finance lease obligations (Refer Note No. 25) 155.12 - Interest accrued but not due on borrowings 393.32 419.52 Security / Earnest Money Deposits 877.45 757.23 Deposits for Containers** 14,669.16 13,758.50 Unclaimed Dividend* 16.98 16.61 Dues to Micro Enterprises and Small Enterprises (Refer Note No. 61) 114.77 150.01 Derivative Liabilities 18.79 181.28 Other Liabilities 3,203.30 2,400.75 Total 23,121.09 19,608.47
* No amount is due at the end of the period for credit to Investors Education and Protection Fund. ** Includes deposits received under Rajiv Gandhi Gramin LPG Vitrak Yojana and Pradhan Mantri Ujjwala Yojana (Central Scheme) ` 3,286.46 Crores (Previous year ` 2,919.13 Crores). The deposit against these schemes have been funded from CSR fund and Government of India.
NOTE 33 OTHER CURRENT LIABILITIES (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Advances from Customers 749.29 745.93 Statutory Liabilities 3,255.49 3,880.85 Dues to Micro Enterprises and Small Enterprises 0.01 1.34 Other (Deferred Income etc.) 121.03 79.90 Total 4,125.82 4,708.02
NOTE 34 PROVISIONS (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Provision for employee benefits (Refer Note No. 48 and 51) 1,590.56 1,280.27 Provision for CSR Expenditure 25.66 172.25 Others (Refer Note No. 57)* 423.17 576.06 Total 2,039.39 2,028.58 * Above includes deposits/ claims made of ` 107.00 Crores (Previous year ` 123.66 Crores) netted off against provisions for the corporation
Annual Report 2019-20 329 NOTE 35 CURRENT TAX LIABILITIES (NET) (CONSOLIDATED) ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Current tax liabilities (Net of taxes paid) 32.85 331.23 Total 32.85 331.23
NOTE 36 REVENUE FROM OPERATIONS (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 A. (i) Sales Petroleum Products 3,24,692.17 3,36,753.08 Crude Oil 3,626.61 1,972.96 3,28,318.78 3,38,726.04 (ii) Subsidy from Central/State Government (Refer Note No. 45) 290.19 912.96 3,28,608.97 3,39,639.00 B. Other operating revenues 1,188.19 1,240.15 Total 3,29,797.16 3,40,879.15 NOTE 37 OTHER INCOME (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Interest Income on Instrument measured at FVTPL 358.43 357.58 Instrument measured at amortized Cost 701.29 662.02 Income Tax Refund - 52.37
Dividend Income Dividend Income from non - current equity instruments at FVOCI 37.41 32.91 Dividend Income from current investments at FVTPL 7.14 14.04
Net gains on fair value changes of Instruments measured at FVTPL^ 222.65 155.26 Derivatives at FVTPL - 256.86
Write back of liabilities no longer required 40.86 13.04 Reversal of allowance on doubtful debts and advances (net) 150.67 - Gain on sale of Property, Plant and Equipment / Non-current Assets held for sale - 3.89 (net) Others# 410.88 489.57 Total 1,929.33 2,037.54 # Includes amortization of capital grants ` 11.75 Crores (Previous year ` 7.28 Crores) for the Corporation. ^ Includes net gain on sale of investments of ` 26.31 Crores (Previous year ` 27.79 Crores) for the Corporation.
330 Bharat Petroleum Corporation Limited NOTE 38 COST OF RAW MATERIALS CONSUMED (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Opening Stock 4,096.79 5,480.51 Add : Purchases 1,21,262.69 1,29,309.57 Less: Closing Stock (3,408.50) (4,096.79) Gross Total 1,21,950.98 1,30,693.29 Less : Exceptional Items (Refer Note No. 69) (54.97) - Net Total 1,21,896.01 1,30,693.29
NOTE 39 PURCHASE OF STOCK-IN-TRADE (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Petroleum Products 1,27,583.08 1,29,895.82 Crude Oil 3,588.92 1,842.41 Others 597.19 317.19 Total 1,31,769.19 1,32,055.42
NOTE 40 CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-TRADE AND WORK-IN-PROGRESS (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Value of opening stock of Finished goods 10,642.26 10,341.43 Stock-in-trade 6,107.07 5,043.26 Work-in-progress 1,254.44 1,012.81 18,003.77 16,397.50 Less : Value of closing stock of Finished goods 11,264.79 10,642.25 Stock-in-trade 5,545.15 6,107.07 Work-in-progress 1,011.52 1,254.44 17,821.46 18,003.76
Net (increase) / decrease in inventories including exceptional items 182.31 (1,606.26) Less: Exceptional Items (Refer Note No. 69) 1,255.38 - Net (increase) / decrease in inventories excluding exceptional items (1,073.07) (1,606.26)
NOTE 41 EMPLOYEE BENEFIT EXPENSES (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Salaries and wages [Refer Note No.48] 2,930.66 3,055.94 Contribution to Provident and Other Funds 578.93 361.25 Staff welfare expenses 510.92 566.84 Total 4,020.51 3,984.03
Annual Report 2019-20 331 NOTE 42 FINANCE COSTS (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Interest Expense* 2,078.54 1,551.73 Interest on income tax demands 6.17 - Other borrowing costs 33.29 27.51 Exchange difference regarded as an adjustment to borrowing costs 519.01 184.71 Total 2,637.01 1,763.95 * Includes ` 507.82 Crores (Previous year - NIL) recognized during this year as interest cost against Lease obligations as per Ind AS 116 for the Corporation. NOTE 43 OTHER EXPENSES (CONSOLIDATED) ` in Crores Particulars 2019-20 2018-19 Transportation 7,328.61 7,131.23 Octroi, Other Levies and Irrecoverable Taxes 1,352.03 1,405.35 Repairs, maintenance, stores and spares consumption 1,566.81 1,548.41 Power and Fuel 6,315.32 7,217.20 Less: Consumption of fuel out of own production (3,348.45) (4,820.82) Power and Fuel consumed (net) 2,966.87 2,396.38 Packages consumed 177.87 210.54 Net losses on fair value changes of Derivatives measured at FVTPL 157.92 - Office Administration, Selling and Other expenses Rent [Refer Note No. 50] 168.47 406.87 Utilities [Refer Note No. 50] 327.07 898.08 Terminalling and related charges 211.73 205.90 Travelling and conveyance 256.14 257.73 Remuneration to auditors Audit fees 2.48 1.42 Fees for other services - Certification 0.47 0.58 Reimbursement of out of pocket expenses 0.01 0.03 Sub-Total 2.96 2.03 Bad debts and other write offs 82.38 0.83 Allowance for doubtful debts & advances (net) - 334.41 Loss on sale of Property, Plant and Equipment/Non-current Assets held for sale (net) 44.09 - Net losses on foreign currency transactions and translations Exchange gains/ losses on foreign currency forwards and principal only swap (185.45) 51.32 contracts Exchange losses on transactions and translations of other foreign currency assets 1,854.56 656.26 and liabilities Sub-total 1,669.11 707.58 CSR Expenditure 286.59 258.17 Impairment Loss on Non- Current assets held for sale/ Intangible assets under 633.02 7.67 development Others 2,378.57 2,215.70 Sub-Total-Office Administration, Selling and Other expenses 6,060.13 5,294.97 Total 19,610.24 17,986.88
332 Bharat Petroleum Corporation Limited Note 44 (CONSOLIDATED) In line with the General Circular No. 39/2014, dated 14th October 2014, issued by the Ministry of Corporate Affairs, the disclosures relevant to Consolidated Financial Statements only have been provided. Note 45 (CONSOLIDATED) Consequent to non-revision in retail selling prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered gross under recovery of ` 255.31 Crores (Previous year ` 882.65 Crores) on sale of sensitive petroleum products. As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as subsidy from Government of India amounting to ` 255.31 Crores (Previous year ` 882.65 Crores) and the same is accounted as Revenue from operations. After adjusting the above compensation, the net under recovery absorbed by the Corporation is Nil (Previous year under recovery Nil). Further, subsidies received from State Governments which are recognized in Revenue from operations is ` 34.88 Crores (Previous year ` 30.31 Crores) during current year. Note 46 (CONSOLIDATED) As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (“KRL”) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012 and July 2016 respectively and 1:2 bonus issue in July 2017, presently the trust holds 20,23,72,422 equity shares of the Corporation. The cost of the original investment together with the additional contribution to the corpus of the trust made in 2014-15 has been reduced from the total equity of the Corporation. To the extent of the face value of the shares, the same has been reduced from the Paid up Share capital of the Corporation and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust has been recognized directly under Other Equity of the Corporation. Note 47 (CONSOLIDATED) The Group has numerous transactions with other oil companies. The outstanding balances (included under Trade Payables / Trade Receivables, etc) from them and certain other outstanding credit and debit balances are subject to confirmation / reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained. Note 48 (CONSOLIDATED) The Group has provided for pay revision dues of non-management staff under salaries and wages amounting to ` 368.89 Crores (Previous year ` 320.71 Crores) based on the available information and judgement. Note 49 Service Concession Arrangements (CONSOLIDATED) The Corporation has entered into service concession arrangements with entities supplying electricity (“The Regulator”) to construct, own, operate and maintain a wind energy based electric power generating station (“Plant”). Under the terms of agreement, the Corporation will operate and maintain the Plant and sell electricity generated to Regulator for a period which covers the substantial useful life of the Plant which may be renewed for such further period as may be mutually agreed upon between the parties. The Corporation will be responsible for any maintenance services during the concession period. The Corporation in turn has a right to charge the Regulator agreed rate as stated in the service concession arrangement. The fair value towards the construction of the Plant has been recognized as an Intangible Asset and is amortized over the useful life of the asset or period of contract whichever is less.
Annual Report 2019-20 333 Note 50 Leases (CONSOLIDATED) The Group enters into lease arrangements for land, godowns, office premises, staff quarters, third party operating plant, tank lorries, time charter vessels and others. Pursuant to Ministry of Corporate Affairs Notification dated 30th March 2019, Ind AS 116 “Leases” applicable w.e.f 1st April 2019 is adopted by the Group using modified retrospective method wherein, at the date of initial application, the lease liability is measured at the present value of remaining lease payments and right-of-use asset has been recognized at an amount equal to lease liability adjusted by an amount of any prepaid expenses. Accordingly, the comparative information of previous period in Financial Statements has not been restated. Under Ind AS 116 “Leases”, at commencement of lease, the Group recognizes right-of-use asset and corresponding Lease Liability. Right-of-use asset is depreciated over lease term on systematic basis and interest on lease liability is charged to statement of Profit and Loss as Finance cost. A. Leases as lessee a) The following is the detailed breakup of Right-of-use assets (by class of underlying assets) included in Property, Plant and Equipment (Note No. 2)
` in Crores Particulars Gross Block Depreciation Net Carrying Amount Ind AS 116 Additions Reclassifications As at For the Reclassifications Up to As at Transition / Deductions 31/03/2020 Year / Deductions 31/03/2020 31/03/2020 On Account Of On Account Of Conclusion Conclusion Land 3,073.70 873.98 3.44 3,944.24 173.69 0.25 173.44 3,770.80 Buildings including Roads 26.42 26.68 - 53.10 7.90 - 7.90 45.20 Plant and Equipments 3,226.89 19.48 - 3,246.37 198.20 - 198.20 3,048.17 Tanks and Pipelines 4.96 - - 4.96 1.98 - 1.98 2.98 Vehicles - 0.18 - 0.18 0.07 - 0.07 0.11 Total 6,331.97 920.32 3.44 7,248.85 381.84 0.25 381.59 6,867.26
b) The following expenses have been charged to Statement of Profit and Loss during FY 2019-20
` in Crores Interest on Lease Liabilities 508.91 Expenses relating to short term leases 757.90 Expenses relating to leases of low value items for the Corporation 13.46 Expenses relating to variable lease payments for the Corporation 4,774.15 (not included in measurement of lease liabilities) c) Total Cash outflow for leases during FY 19-20 is ` 5,687.67 Crores d) Income from Sub leasing of Right-of-use assets recognized in statement of profit and loss during FY 2019-20 is ` 0.71 Crores e) Maturity Analysis of Lease Liabilities as per Ind AS 116 Leases
` in Crores As at 31/03/2020 Contractual Cash Flows Upto 1 1-3 years 3-5 years More than Total year 5 years Cash outflows 638.52 1,287.06 1,281.69 9,616.81 12,824.08
334 Bharat Petroleum Corporation Limited Note 50 Leases (CONSOLIDATED) (CONTD.) f) The Group had exercised the following transition choices/practical expedients available under Ind AS 116 “Leases” (i) The Group has elected below practical expedients for transition to Ind AS 116 “Leases” 1. Applied this Standard to contracts that were previously identified as containing a lease applying Ind AS 17. 2. Applied a single discount rate to a portfolio of leases with reasonably similar characteristics (such as leases with a similar remaining lease term for a similar class of underlying asset in a similar economic environment). 3. Not to apply the requirements to leases for which the lease term ends within 12 months from the date of initial application. (ii) The Group has applied paragraph C5(b) of Appendix C of Ind AS 116 for transition which states that a lessee shall apply this standard to its leases retrospectively with the cumulative effect of initially applying the Standard recognized at the date of initial application. Accordingly, The Group measures lease liability at the present value of the remaining lease payments, discounted using the Group incremental borrowing rate at the date of initial application. (iii) The Group recognizes right-of-use asset at the date of initial application for leases at an amount equal to the lease liability, adjusted by the amount of any prepaid expenses relating to that lease recognized in the balance sheet immediately before the date of initial application. (iv) The Group has continued to classify Intangible Assets under the same head as classified as on 31st March 2019 and not separated lease and non-lease components of composite contracts. (v) Transition Impact 1. At the date of initial application i.e. 1st April 2019, the Group has recognized ` 5,659.97 Crores as lease liabilities in the books of accounts for those leases that were previously identified as leases as per Ind AS 17 Leases computed by discounting remaining lease payments as at 1st April 2019 by weighted average incremental borrowing rate 8.71% based on remaining lease term as on 1st April 2019. 2. Further, on transition,corresponding to lease liability stated above, the Group has also recognized right-of-use assets ` 6,331.97 Crores after including an amount of ` 671.94 Crores recognized as prepaid expenses/revenue advances in the Balance Sheet as at 31st March 2019. 3. The application of this Standard has resulted in a net decrease in profit before tax of FY 2019- 20 by ` 254.88 Crores (Increase in depreciation & amortization expenses and finance cost by ` 381.84 Crores and ` 508.91 Crores respectively and decrease in other expenses by ` 635.87 Crores). 4. Reconciliation between Operating lease commitments pertaining to non-cancellable leases disclosed as per Ind AS 17 Leases for FY 2018-19 discounted using incremental borrowing rate at the date of transition and lease liabilities recognized in books of accounts is mainly on account of estimated growth rate of CPI/WPI considered while disclosing minimum lease payments of certain leases in FY 2018-19. ` in Crores a. Operating lease commitments pertaining to non-cancellable leases 9,177.78 (As per Ind AS 17 as at 31st March 2019) b. Short term leases (as per Ind AS 116) (3.01) c. Low value items (as per Ind AS 116) - d. Variable Lease payments (as per Ind AS 116) - e. Other adjustments mainly on account of change in CPI/WPI (2,441.46) f. Discounting impact (3,351.61) g. Lease Liability as on 1st April 2019 3,381.70
Annual Report 2019-20 335 Note 50 Leases (CONSOLIDATED) (CONTD.) B. Leases as lessor a) The Corporation enters into operating lease arrangements in respect of lands, commercial spaces, storage and distribution facilities etc. The details are as follows:
As at 31/03/2020 ` in Crores Particulars Land Buildings Plant and Tanks & Furnitures Office Railway Vehicles ROU Equipments Pipelines and Equipment Sidings Assets Fixtures Gross Carrying 59.73 144.04 113.03 340.14 7.20 14.96 71.98 0.01 0.95 Amount Accumulated - 24.72 41.02 86.39 5.39 5.00 27.80 - 0.12 depreciation Depreciation - 5.62 8.12 14.39 0.35 1.55 5.86 - 0.12 recognized in statement of P&L for the year ended 31st March 2020
As at 31/03/2019 ` in Crores Particulars Land Buildings Plant and Tanks & Furnitures Office Railway Vehicles Equipments Pipelines and Equipment Sidings Fixtures Gross Carrying 27.07 128.48 110.09 328.33 6.72 6.30 62.87 0.01 Amount Accumulated - 19.20 32.76 72.00 4.77 2.62 21.95 - depreciation Depreciation - 5.18 8.28 14.15 0.55 0.83 5.53 - recognized in statement of P&L for the year ended 31st March 2019 b) Income earned from Operating Leases recognized in statement of profit and loss during FY 2019-20 is ` 52.04 Crores (of which variable lease payments that do not depend on index or rate is ` 8.33 Crores) i. Maturity Analysis of Lease payments receivable The maturity analysis of lease payments receivable under operating leases as at 31st March 2020 is as follows:
` in Crores Particulars Within 1 1 - 2 2 - 3 3 - 4 4 - 5 > 5 years Total year years years years years Undiscounted Lease 29.65 29.19 28.79 28.85 28.91 90.15 235.55 payments receivable
336 Bharat Petroleum Corporation Limited Note 51 Employee benefits (CONSOLIDATED) [A] Post Employment Benefit Plans: Defined Contribution Scheme Defined Contribution Scheme (DCS) was introduced effective from 1st Jan 2007. Group contributes a defined percentage of the employee salary out of the total entitlements on account of superannuation benefits under this scheme. Corporation and its subsidiary NRL introduced GOI managed PFRDA NPS for its employees during the current financial year and is now contributing upto 10% of the salary from the above defined percentage, to the NPS for the staff who have enrolled under the scheme. The remaining contribution continues to be made under DCS of which the Fund is maintained under a trust for the Corporation and its subsidiary NRL. ` in Crores Amount recognized in the Statement of Profit and Loss 2019-20 2018-19 Defined Contribution Scheme 148.12 121.99 Defined Benefit Plans The Group has the following Defined Benefit Plans Gratuity The Corporation and its subsidiary NRL has a defined benefit gratuity plan managed by a trust. The Trustees administer contributions made to the trust, investments thereof etc. Based on actuarial valuation, the contribution is paid to the trust which is invested in plan assets as per the investment pattern prescribed by the Government. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service, on superannuation, resignation, termination or to his nominee on death. Other Defined Benefits include (a) Post Retirement Medical Scheme (managed by a trust) to employees, spouse, dependent children and dependent parents; (b) Pension / Ex-Gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent Disablement benefit given to the spouse of the employee / employee, provided the deceased’s family / disabled employee deposits with the Corporation, retirement dues such as PF, Gratuity, Leave Encashment etc., payable to them; (d) Resettlement allowance paid to employees to permanently settle down at the time of retirement; and (e) The Corporation makes contribution towards Provident Fund, which is administered by the trustees. The Corporation has an obligation to fund any shortfall on the yield of the trust’s investments over the interest rates declared by the Government under EPF scheme. These defined benefit plans expose the Group to actuarial risks, such as longetivity risk, interest rate risk, and market (investment) risk.
Annual Report 2019-20 337 Note 51 Employee benefits (CONSOLIDATED) (CONTD.) Movement in net defined benefit (Asset)/ Liability
a) Reconciliation of balances of Defined Benefit Obligations ` in Crores Gratuity - Gratuity - Post Retirement Burmah Shell Pension Particulars Funded Non Funded Medical - Funded - Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 Defined Obligations at the 1,140.70 1,099.48 0.42 0.21 1,287.05 1,078.46 71.78 77.43 beginning of the year Interest Cost 88.52 86.55 0.03 0.02 100.13 83.67 5.18 5.95 Current Service Cost 15.51 15.75 0.02 0.01 44.23 40.41 - - Past Service cost ------Benefits paid (170.27) (117.11) (0.20) 0.20 (49.63) (47.71) (14.96) (15.39) Actuarial (Gains)/ Losses on obligations - Changes in Financial 58.72 6.70 0.01 (0.00) 208.75 (3.79) 1.77 1.09 assumptions - Experience adjustments 9.48 49.33 (0.02) (0.02) (3.29) 136.01 8.37 2.70 Defined Obligations at the 1,142.66 1,140.70 0.26 0.42 1,587.24 1,287.05 72.14 71.78 end of the year b) Reconciliation of balances of Fair Value of Plan Assets ` in Crores Gratuity - Funded Post Retirement Particulars Medical - Funded 2019-20 2018-19 2019-20 2018-19 Fair Value at the beginning of the year 800.28 696.42 1,173.16 1,096.39 Interest income (a) 62.11 54.79 91.27 85.07 Return on Plan Assets, excluding interest income(b) 1.58 1.27 (12.61) 2.25 Actual Return on Plan assets (a+b) 63.69 56.06 78.66 87.32 Contribution by employer 8.99 50.70 535.43 10.15 Contribution by employee - - 1.35 1.41 Benefits paid (1.50) (2.90) (49.63) (22.11) Fair Value of Plan Assets at the end of the year 871.46 800.28 1,738.97 1,173.16 c) Amount recognized in Balance sheet (a-b) ` in Crores Gratuity - Funded Gratuity - Post Retirement Burmah Shell Pension Particulars Non Funded Medical - Funded - Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 Amount recognized in 271.20 340.42 0.26 0.42 (151.73) 113.89 72.14 71.78 Balance sheet (a - b)
338 Bharat Petroleum Corporation Limited Note 51 Employee benefits (CONSOLIDATED) (CONTD.) d) Amount recognized in Statement of Profit and Loss ` in Crores Gratuity - Funded Gratuity - Post Retirement Burmah Shell Pension Particulars Non Funded Medical - Funded - Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 Current Service Cost 15.51 15.75 0.02 0.01 44.23 40.41 - - Past Service cost ------Interest Cost 88.52 86.55 0.03 0.02 100.13 83.67 5.18 5.95 Interest income (62.11) (54.79) - - (91.27) (85.07) - - Contribution by employee - - - - (1.35) (1.41) - - Expenses for the year 41.92 47.51 0.05 0.03 51.74 37.60 5.18 5.95 e) Amount recognized in Other Comprehensive Income Remeasurements Actuarial (Gains)/ Losses - Changes in financial 58.72 6.70 0.01 (0.00) 208.75 (3.79) 1.77 1.09 assumptions - Experience adjustments 9.48 49.33 (0.02) (0.02) (3.29) 136.01 8.37 2.70 Return on plan assets (1.58) (1.27) - - 12.61 (2.25) - - excluding net interest cost Total 66.62 54.76 (0.01) (0.02) 218.07 129.97 10.14 3.79 f) Major Actuarial Assumptions Discount Rate (%) 6.87 7.76 - 6.83 7.59 6.81 - 7.77 - 6.43 7.22 7.77 6.87 7.78 Salary Escalation/ Inflation 8.00 8.00 8.00 8.00 NA NA - - (%) Expected Return on Plan 6.87 7.76 - - - 6.81 - 7.77 - - - assets (%) 7.77 6.87 7.78 The estimates for future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors. The expected return on plan assets is based on market expectation at the beginning of the period, for returns over the entire life of the related obligations. Mortality rate is considered by our Actuary as per IALM 2006-08 table for the purpose of actuarial assumptions. g) Investment pattern for Fund Particulars Gratuity - Funded Post Retirement Medical - Funded As at As at As at As at 31/03/2020 31/03/2019 31/03/2020 31/03/2019 Category of Asset % % % % Government of India Asset 15.97 17.38 14.97 2.68 Corporate Bonds 6.49 4.13 55.96 74.85 Insurer Managed funds 76.19 70.94 2.43 4.37 State Government 0.52 0.85 14.23 9.67 Others 0.83 6.70 12.41 8.43 Total (%) 100.00 100.00 100.00 100.00 For the funded plans, the trust maintains appropriate fund balance considering the analysis of maturities. Projected Unit credit method is adopted for Asset-Liability Matching. During this financial year, Corporation Board has decided to contribute an estimated amount of ` 122 Crores towards advance funding to PRMB fund against the future service liabilities of the employees to protect the PRMB fund sustainability for the subsequent period in view of proposed disinvestment. Accordingly company has contributed such advance funding and the impact of the same as on 31st March 2020 is shown as surplus in asset/liabilities movements of PRMB Fund. During this financial year, in respect of investments made by PRMB Trust of the Corporation, an impairment provision of ` 35 Crores were made in PRMB trust accounts and accordingly the assets/liabilities of the PRMB trust has been estimated.
Annual Report 2019-20 339 Note 51 Employee benefits (CONSOLIDATED) (CONTD.) Movement in net defined benefit (Asset)/ Liability ` in Crores Death / Permanent Re-settlement Ex-gratia scheme - Felicitation Scheme Particulars disablement - Allowance - Non Funded - Non funded Non Funded Non Funded 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 a) Reconciliation of balances of Defined Benefit Obligations Defined Obligations at 11.26 11.51 16.67 16.66 341.88 325.79 84.45 - the beginning of the year Interest Cost 0.80 0.86 1.29 1.31 26.60 25.28 6.57 - Current Service Cost - - 3.52 3.35 5.66 4.05 2.37 0.72 Past service cost ------83.73 Benefits paid (7.49) (13.24) (1.90) (2.65) (27.97) (24.43) (10.18) - Actuarial (Gains)/ Losses on obligations - Changes in Financial 2.12 1.12 1.05 0.08 28.82 (0.55) 6.62 - assumptions - Experience adjustments 5.65 11.01 (3.15) (2.08) 0.48 11.74 (10.13) - Defined Obligations at 12.34 11.26 17.48 16.67 375.47 341.88 79.70 84.45 the end of the year
b) Amount recognized in 12.34 11.26 17.48 16.67 375.47 341.88 79.70 84.45 Balance sheet
c) Amount recognized in Statement of Profit and Loss Current Service Cost - - 3.52 3.35 5.66 4.05 2.37 0.72 Past Service Cost ------83.73 Interest Cost 0.80 0.86 1.29 1.31 26.60 25.28 6.57 - Expenses for the year 0.80 0.86 4.81 4.66 32.26 29.33 8.94 84.45
d) Amount recognized in Other Comprehensive Income Remeasurements Actuarial (Gains)/ Losses On Obligation - Changes in Financial 2.12 1.12 1.05 0.08 28.82 (0.55) 6.62 - assumptions - Experience adjustments 5.65 11.01 (3.15) (2.08) 0.48 11.74 (10.13) - Total 7.77 12.13 (2.10) (2.00) 29.30 11.19 (3.51) -
e) Major Actuarial Assumptions Discount Rate (%) 6.24 7.07 6.87 7.76-7.77 6.81 7.78 6.81 7.78 The estimates for future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors. The expected return on plan assets is based on market expectation at the beginning of the period, for returns over the entire life of the related obligations. Mortality rate is considered by our Actuary as per IALM 2006-08 table for the purpose of actuarial assumptions.
340 Bharat Petroleum Corporation Limited Note 51 Employee benefits (CONSOLIDATED) (CONTD.) Sensitivity analysis Sensitivity analysis for significant actuarial assumptions, showing how the defined benefit obligation would be affected, considering increase/decrease of 1% as at 31st March 2020 is as below:
` in Crores Particulars Gratuity - Post Burmah Death/ Resettlement Exgratia Felicitation Gratuity- Funded Retirement shell Permanent allowance- scheme- scheme- Non funded Medical - Pension- Disablement- Non funded Non Non funded Funded Non Non funded funded Funded + 1% change (65.43) (215.51) (2.22) (2.53) (1.16) (29.64) (6.81) (0.01) in rate of Discounting - 1% change 75.37 279.59 2.38 2.72 1.34 34.73 8.20 0.01 in rate of Discounting + 1% change 12.25 ------in rate of Salary increase/ inflation - 1% change in (14.11) ------rate of Salary increase/ inflation Sensitivity analysis for significant actuarial assumptions, showing how the defined benefit obligation would be affected, considering increase/decrease of 1% as at 31st March 2019 is as below:
` in Crores Particulars Gratuity - Post Burmah Death/ Resettlement Exgratia Felicitation Gratuity- Funded Retirement shell Permanent allowance- scheme- scheme- Non funded Medical - Pension- Disablement- Non funded Non funded Non funded Funded Non Non funded Funded + 1% change (59.48) (160.29) (2.25) (2.57) (1.04) (25.70) (6.64) (0.01) in rate of Discounting - 1% change 67.83 203.26 2.30 2.76 1.19 29.93 8.03 0.01 in rate of Discounting + 1% change 12.05 ------in rate of Salary increase/ inflation - 1% change in (13.90) ------rate of Salary increase/ inflation Sensitivity for significant actuarial asssumptions is computed by varying one actuarial assumption used for the valuation keeping all other actuarial assumptions constant.
Annual Report 2019-20 341 Note 51 Employee benefits (CONSOLIDATED) (CONTD.) The expected future cash flows as at 31st March 2020 were as follows: ` in Crores Gratuity - Post Burmah Death/ Resettlement Exgratia Felicitation Gratuity- Funded Retirement shell Permanent allowance- scheme- scheme- Non funded Particulars Medical - Pension- Disablement- Non funded Non Non funded Funded Non Funded Non funded funded Projected benefits payable in future years from the date of reporting 1st following year 171.99 57.51 14.75 5.47 1.93 26.24 9.93 0.01 2nd following year 92.30 67.39 10.83 2.52 0.92 26.32 2.77 0.01 3rd following year 138.80 73.07 9.17 2.11 1.91 25.16 3.27 0.19 4th following year 137.87 79.22 7.69 1.73 1.81 24.03 3.16 - 5th following year 125.16 85.22 6.39 1.38 1.69 22.93 4.08 - Years 6 to 10 454.45 529.97 17.83 4.00 7.95 99.10 24.95 0.05
Other details as at 31st March 2020 Gratuity - Post Burmah Death/ Resettlement Exgratia Felicitation Gratuity- Funded Retirement shell Permanent allowance- scheme- scheme- Non funded Particulars Medical - Pension- Disablement- Non funded Non Non funded Funded Non Funded Non funded funded Weighted average duration of the Projected Benefit 8 - 10 16 - 25 4 6 8 - 11 10 10 - Obligation (in years) Prescribed contribution for 142.80 ------next year ( ` in Crores) [B] Provident Fund: The Corporation’s contribution to the Provident Fund is remitted to separate trust established for this purpose based on a fixed percentage of the eligible employees salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss. The actual return earned by the fund has mostly been higher than the Government specified minimum rate of return in the past years except for current year. The estimated interest short fall for the year 2019-20 is ` 8.00 Crores. After necessary provision for interest shortfall and provisions on certain investments made in corporate bonds of PF trust, necessary employer obligation of ` 132.01 Crores has been recognized and debited to Statement of Profit and Loss. The Fund balance is sufficient to meet the fund obligations as on 31st March 2020 and 31st March 2019. The details of fund obligations and plan assets are given below: ` in Crores As at As at Particulars 31/03/2020 31/03/2019 Present value of benefit obligation at period end 5,584.69 5,260.14 Note: In case of NRL & BPRL, the contribution to Provident Fund is remitted to Employees Provident Fund Organisation on a fixed percentge of the eligible employee’s salary and charged to Statement of Profit and Loss.
342 Bharat Petroleum Corporation Limited Note 52 Related party transactions (CONSOLIDATED) a) Names of the Related parties Joint Ventures & Associate Companies 1. Indraprastha Gas Limited 2. Petronet India Limited * 3. Petronet CI Limited* 4. Petronet LNG Limited 5. Bharat Oman Refineries Limited 6. Maharashtra Natural Gas Limited 7. Central UP Gas Limited 8. Sabarmati Gas Limited 9. Bharat Stars Services Private Limited (Including Bharat Stars Services (Delhi) Private Limited) 10. Bharat Renewable Energy Limited * 11. Matrix Bharat Pte. Ltd. 12. Delhi Aviation Fuel Facility Private Limited 13. Kannur International Airport Limited 14. GSPL India Gasnet Limited 15. GSPL India Transco Limited 16. Mumbai Aviation Fuel Farm Facility Private Limited 17. Kochi Salem Pipeline Private Limited 18. Petroleum India International# 19. BPCL-KIAL Fuel Farm Private Limited 20. Haridwar Natural Gas Private Limited 21. Goa Natural Gas Private Limited 22. FINO Paytech Limited (including Fino Payments Bank) 23. Ratnagiri Refinery & Petrochemicals Limited 24. Ujjwala Plus Foundation (Section 8 company) 25. IBV (Brasil) Petroleo Ltda. 26. Taas India Pte Ltd 27. Vankor India Pte Ltd 28. Falcon Oil & Gas BV 29. Mozambique LNG 1 Company Pte Ltd. 30. Mozambique LNG1 Holding Company Ltd. 31. Mozambique LNG1 Financing Company Ltd. 32. LLC TYNGD 33. JSC Vankorneft 34. Urja Bharat Pte. Ltd. 35. DNP Limited 36. Brahmaputra Cracker and Polymer Limited 37. Assam Bio Refinery Private Limited 38. Indradhanush Gas Grid Limited 39. IHB Private Limited *Companies in the process of winding up # Dissolved during the year
Annual Report 2019-20 343 Note 52 Related party transactions (CONSOLIDATED) (CONTD.) Key Management Personnel : 1. Shri D. Rajkumar, Chairman & Managing Director 2. Shri S. Ramesh, Director (Marketing) (Upto 24.09.2018) 3. Shri A.K. Singh, Director (Marketing) Appointed (w.e.f. 01.10.2018) 4. Shri R. Ramachandran, Director (Refineries) 5. Shri K. Padmakar, Director (Human Resources) 6. Shri K. Sivakumar, Director (Finance) (Upto 08.05.2018) 7. Shri N. Vijayagopal, Director (Finance) Appointed (w.e.f. 17.12.2018) 8. Shri M. Venugopal, (Company Secretary) (Upto 31.12.2019) 9. Smt. V. Kala, Company Secretary, Appointed (w.e.f. 13.02.2020) 10. Shri Rajesh Kumar Mangal, Independent Director (Upto 30.11.2019) 11. Shri Deepak Bhojwani, Independent Director (Upto 01.12.2018) 12. Shri Gopal Chandra Nanda, Independent Director (Upto 01.12.2018) 13. Shri Vishal V Sharma, Independent Director (Upto 08.02.2020) 14. Dr. K. Ellangovan, Govt. Nominee Director 15. Smt. Jane Mary Shanti Sundharam, Independent Director (Upto 04.03.2020) 16. Shri Vinay Sheel Oberoi, Independent Director (Upto 10.04.2020) 17. Dr. (Smt.) Tamilisai Soundararajan, Independent Director (Upto 23.03.2019) 18. Shri Harshad P. Shah, Independent Director Appointed(w.e.f. 16.07.2019) 19. Shri Rajiv Bansal, Govt. Nominee Director (Upto 07.01.2020) 20. Shri Rajesh Aggarwal, Govt. Nominee Director, Appointed (w.e.f. 08.01.2020) b) The nature wise transactions of the Group with the above related parties are as follows: ` in Crores S. Nature of Transactions 2019-20 2018-19 No. 1. Purchase of goods 50,535.18 40,132.56 2. Sale of goods 3,549.87 2,284.92 3. Purchase of fixed assets - 0.09 4. Rendering of Services 142.92 106.72 5. Receiving of Services 425.44 358.27 6. Interest Income / Share of profit/(loss) 114.38 115.73 7. Dividend Income and other receipts 243.13 234.91 8. Investment and Advance for Investments- Equity 987.98 364.13 9. Management Contracts 36.07 32.35 (Employees on deputation/ consultancy services) 10. Lease Rental & other charges received 33.19 30.96 11. Lease Rental & other Charges paid 0.10 0.10 12. Refund of Capital Contribution 0.10 - 13. Deposit given 0.06 0.04 14. Deposit refund received - 0.02 15. Reduction in Financial Guarantee - 1,046.88 16. Receivables as at year end* 3,544.22 3,804.09 17. Payables as at year end* 1,655.39 2,228.48 18. Commitments - 137.65 19. Guarantee Outstanding 1,385.24 1,333.03 * The outstanding balances are unsecured and are settled in cash except advance against equities which are settled in equity.
344 Bharat Petroleum Corporation Limited Note 52 Related party transactions (CONSOLIDATED) c) In the course of its ordinary business, the Group enters into transactions with other Government-controlled entities (not included in the list above). The Group has transactions with other government-controlled entities,including but not limited to the followings: • Sales and purchases of goods and ancillary materials; • Rendering and receiving of services; • Receipt of dividends; • Loans and advances; • Guarantees; • Depositing and borrowing money; and • Use of public utilities. These transactions are conducted in the ordinary course of business on terms comparable to those with other entities that are not government-controlled entities. d) Key management personnel compensation
` in Crores Particulars 2019-20 2018-19 Short-term employee benefits 3.54 5.64 Post-employee benefits 0.63 0.36 Other long-term benefits 0.31 - Others (including sitting fees to non-executive directors) 0.49 0.99 Note 53 (CONSOLIDATED) Dues from Directors of the Corporation is ` 0.34 Crores (Previous year ` 0.41 Crores) and Dues from Officers of the Corporation is ` 4.62 Crores (Previous year ` 4.32 Crores). Note 54 Earnings Per Share (EPS) (CONSOLIDATED)
` in Crores Particulars 2019-20 2018-19 i. Profit attributable to owners of the Corporation for basic and diluted 3,055.36 7,802.30 earnings per share ii. Weighted average number of ordinary shares Issued ordinary shares at 1st April (In Crores) 216.93 216.93 Less : Investment held by BPCL Trust for Investment in Shares (20.24) (20.24) [Refer Note No. 46] Weighted average number of shares at period end for basic and diluted 196.69 196.69 EPS (In Crores) Basic and Diluted EPS (`) 15.53 39.67 Note 55 (CONSOLIDATED) The Corporation has elected to continue the policy adopted under Previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of 31st March 2016 i.e. foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any, accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of the liability. The net amount remaining unamortized under Foreign Currency Monetary Item Translation Difference Account as at 31st March 2020 is Nil (net loss as at 31st March 2019 ` 29.34 Crores).
Annual Report 2019-20 345 Note 56 Impairment of Assets (CONSOLIDATED) The Corporation assesses, at each reporting date, whether there is an indication of impairment of assets. Further, it is assumed that suitable mechanism would be in place by the Government of India, in line with earlier/ current year(s), to provide compensation towards under recoveries of margin, if any, and recoveries against Direct Benefit Transfer for LPG Scheme on account of sale of sensitive petroleum products in subsequent years. Based on the assessment, there is no indication of impairment of assets as at 31st March 2020. Note 57 PROVISIONS (CONSOLIDATED) In compliance of Ind AS 37 on “Provisions, Contingent Liabilities and Contingent Assets”, the required information is as under: ` in Crores Opening Additions during Utilization Reversals Closing Nature balance the year during the year during the year balance Excise 20.00 74.28 74.25 19.45 0.58 Customs 3.24 - - - 3.24 Service Tax 2.38 1.83 1.83 2.38 - Income Tax (TDS) - 4.20 - - 4.20 VAT/ Sales Tax/ Entry Tax 525.62 14.52 42.23 148.05 349.86 Property Tax/Legal Cases 42.54 23.00 8.72 0.83 55.99 Total 593.78 117.83 127.03 170.71 413.87 Previous year 671.34 44.11 13.39 108.28 593.78 The above provisions are made based on estimates and the expected timing of outflows is not ascertainable at this stage. Above includes provision of ` 107.00 Crores (Previous year ` 123.66 Crores) for which deposits/claims have been made for the Corporation. In case of BPRL, the non-current and current provisions for Liquidated Damages and Abandonment is ` 125.63 Crores (Previous year ` 124.96 Crores). Liquidated Damages: In respect of blocks held in India, as per the Production Sharing Contracts (PSC) signed by BPRL with the Government of India (GoI), it is required to complete Minimum Work Programme (MWP) within stipulated time. In case of delay, Liquidated Damages (LD) is payable for extension of time to complete MWP. Further, in case it does not complete MWP or surrender the block without completing the MWP, an amount as agreed in PSC is required to be paid to the GoI for incomplete portion of the MWP. Accordingly, BPRL has provided ` 111.95 Crores towards liquidated damages as on 31st March 2020 (Previous year ` 102.72 Crores) in respect to various blocks. Abandonment: BPRL has Participating Interest in various oil and gas blocks along with other consortium partners. It has made a provision of ` 13.68 Crores as on 31st March 2020 (Previous year ` 22.24 Crores) in respect of its share of the abandonment obligation.
346 Bharat Petroleum Corporation Limited ------5.48 31.76 18.79 94.12 10.35 92.46 466.78 287.85 Total 2,363.59 1,224.45 1,900.92 5,208.54 1,524.99 ` in Crores 13,293.90 14,577.56 ------66.62 1,900.92 Level 3 ------Fair value 5.48 31.76 18.79 94.12 10.35 92.46 466.78 1,224.45 1,524.99 Level 2 13,293.90 ------221.23 2,363.59 5,208.54 Level 1 14,577.56 5.48 58.69 31.76 18.79 27.24 37.05 94.12 10.35 80.18 365.21 799.63 610.74 467.01 287.85 Total 8,864.19 5,964.30 2,299.48 1,187.31 6,724.82 5,378.02 1,900.92 1,248.01 5,208.55 1,254.10 97,935.21 19,274.98 13,107.21 17,795.15 13,793.90 15,539.45 24,499.28 - - - - - 0.01 58.69 31.76 27.24 37.05 94.12 80.18 365.21 799.63 610.74 467.01 Cost 8,864.19 5,964.30 2,299.48 1,187.31 6,724.82 5,378.02 1,248.01 1,254.10 97,916.42 19,274.98 13,107.21 17,795.15 13,793.90 15,539.45 17,086.15 Amortized ------Carrying amount 287.85 287.85 such FVOCI - designated as designated ------5.48 18.79 18.79 10.35 7,125.28 1,900.92 5,208.54 at FVTPL Mandatorily 9 9 9 9 8 9 9 32 31 30 26 25 25 32 19 10 15 17 16 18 19 19 18 Note 8 & 14 25 & 32 25 & 32 25 & 32 25 & 32 25 & 32 Reference Accounting classification and fair values hierarchy. It does in the fair value and financial liabilities, including financial assets their levels shows the carrying amounts and fair values of table The following not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. Total Note: There are no categories of financial instruments other than those mentioned above. Other Current liabilities Trade and Other Payables Borrowings -Current Other Non-Current financial liabilities Foreign Currency Loans - Syndicated Lease Obligation Interest Free Loan from Govt. of Kerala Term loans Debentures OIDB Loans Total Financial liabilities Derivative Liability on Swaps Bonds -Current Others -Non-current Trade receivables Bank Balances other than Cash and cash equivalents Other Deposits Cash and cash equivalents Loan to Joint Venture-variable rate Loans Non Current - Loans to employee Non-current - Others Current Financial assets Investment in equity instruments Investment in debt instruments Derivative instruments - Commodity related Derivative instruments - Forward contracts Deposits Loan to Joint Venture-fixed rate Non Current Current As at 31/03/2020
N ote 58 F inancial instruments (CONSOLIDATED) A.
Annual Report 2019-20 347 ------1.92 1.96 0.51 29.27 21.25 38.00 97.97 179.36 433.84 610.12 6,508.73 2,311.82 Total 1,371.19 1,803.37 1,526.67 5,075.89 16,184.95 ` in Crores ------114.30 1,803.37 Level 3 ------Fair value 1.92 1.96 0.51 29.27 21.25 38.00 179.36 433.84 6,508.73 1,371.19 1,526.67 Level 2 ------97.97 495.82 2,311.82 5,075.89 Level 1 16,184.95 1.92 1.96 0.51 29.27 34.59 56.67 86.52 54.32 97.67 21.25 37.12 97.97 179.36 248.27 414.25 433.96 610.12 8,108.55 8,598.95 8,508.73 Total 2,299.32 1,358.50 6,906.25 9,413.93 1,684.71 1,803.37 1,034.18 1,402.77 5,075.90 17,834.47 17,502.62 15,901.19 80,414.14 29,425.03 ------0.01 29.27 34.59 56.67 86.52 54.32 97.67 37.12 248.27 414.25 433.96 8,108.55 8,598.95 8,508.73 2,299.32 1,358.50 6,906.25 9,413.93 1,684.71 1,034.18 1,402.77 17,834.47 17,502.62 15,901.19 80,232.86 21,813.96 Amortized Cost ------Carrying amount 610.12 610.12 such FVOCI - designated as ------1.92 1.96 0.51 21.25 97.97 179.36 181.28 1,803.37 5,075.89 7,000.95 FVTPL Mandatorily at 9 9 9 9 9 9 25 32 25 26 30 31 32 25 25 15 10 19 32 32 17 18 16 14 19 19 19 14 Note 8 & 14 8 & 14 25 & 32 25 & 32 Reference Term loans External Commercial Borrowings Foreign Currency Loans - Syndicated Other Non-Current financial liabilities Borrowings -Current Trade and Other Payables Other Current liabilities Total Note: There are no categories of financial instruments other than those mentioned above. Term loans Debentures OIDB Loans Bonds Trade receivables Others -Non-current -Current Total Financial liabilities Derivative Liability on Forwards Derivative Liability on Swaps Bank Balances other than Cash and cash equivalents -Non-current- Others -Current Other Deposits Cash and cash equivalents Loans -Non-current- Loans to employee Loan to Joint Venture-variable rate Investment in T Bills Derivative instruments - Commodity related Derivative instruments - Interest rate swap Derivative instruments- Forward contracts Deposits Loan to Joint Venture-fixed rate Investment in mutual funds Investment in debt instruments Financial assets Investment in equity instruments As at 31/03/2019 N ote 58 F inancial instruments (CONSOLIDATED) (C ontd .)
348 Bharat Petroleum Corporation Limited Note 58 Financial instruments (CONSOLIDATED) (Contd.) B. Measurement of fair values Valuation techniques and significant unobservable inputs The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values, for financial instruments measured at fair value in the statement of financial position, as well as the significant unobservable inputs used. Financial instruments measured at fair value
Significant Inter-relationship unobservable inputs between significant unobservable Type Valuation technique inputs and fair value measurement Unquoted equity The Valuation is based on market Adjusted market The estimated fair shares (Cochin multiples derived from quoted prices multiple (P/E) value would increase/ International Airport of companies comparable to investee (decrease) if Adjusted Limited) and the expected revenue and PAT of market multiple were the investee. higher/(lower) Derivative Forward pricing: The fair value is Not applicable Not applicable instruments - forward determined using quoted forward exchange contracts exchange rates at the reporting date. Derivative Discounted cash flows: The valuation Not applicable Not applicable instruments - interest model considers the present value of rate swap and expected receipt/payment discounted currency swap using appropriate discounting rates. This technique also involves using the interest rate curve for projecting the future cash flows. Derivative Fair valuation of Commodity Derivative Not applicable Not applicable instruments - instruments are based on forward commodity contracts assessment done by Platts which is an independent agency which assesses benchmark global crude oil and product prices. Globally counterparties also use Platts assessment for settlement of transactions. Non current financial Discounted cash flows: The valuation Not applicable Not applicable assets and liabilities model considers the present value of measured at expected receipt/payment discounted amortized cost using appropriate discounting rates. Loan to Joint Venture Binomial model: The share price is Share price (31st March Not applicable (in case of BPRL) simulated using a Binomial model 2020: 1.09) Credit from the valuation date to the maturity spread (31st March of the loan. As the number of shares 2020: 2.50%) is dependent on USD/BRL exchange rate, the same was simulated using a GARCH model
Annual Report 2019-20 349 Note 58 Financial instruments (CONSOLIDATED) (Contd.) Level 3 fair values Reconciliation of Level 3 fair values The following table shows a reconciliation of the opening and closing balances for Level 3 fair values.
` in Crores Equity Loan to joint Particulars securities venture (in case of BPRL) Opening Balance(01st April 2018) 105.26 1,653.72 Net change in fair value (unrealised) 9.04 38.92 Foreign Currency Translation Reserve (FCTR) - (2.71) Foreign Exchange Fluctuations - 113.44 Closing Balance (31st March 2019) 114.30 1,803.37
Opening Balance(01st April 2019) 114.30 1,803.37 Net change in fair value (unrealised) (47.68) (69.12) Foreign Currency Translation Reserve (FCTR) - (4.14) Effect of foreign exchange fluctuations - 170.81 Closing Balance (31st March 2020) 66.62 1,900.92 Sensitivity analysis For the fair values of unquoted equity shares in case of Corporation and loan to joint venture in case of BPRL reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects: ` in Crores As at 31/03/2020 As at 31/03/2019 Significant unobservable inputs Profit or loss Profit or loss Increase Decrease Increase Decrease P/E (5% movement) 3.33 (3.33) 5.71 (5.71) Credit spread (10% movement) (17.75) 17.92 (21.32) 21.57 Share price (10% movement) 303.88 (303.88) 262.47 (262.47) C. Financial risk management C.i. Risk management framework The Group has exposure to the following risks arising from financial instruments: • Credit risk ; • Liquidity risk ; and • Market risk C.ii. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade and other receivables, cash and cash equivalents and other bank balances, derivatives and debt securities. The maximum exposure to credit risk in case of all the financial instuments covered below is restricted to their respective carrying amount.
350 Bharat Petroleum Corporation Limited Note 58 Financial instruments (CONSOLIDATED) (Contd.) (a) Trade and other receivables from customers Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Group grants credit terms in the normal course of business. As at 31st March 2020 and 31st March 2019 the Group’s retail dealers, industrial and aviation customers accounted for the majority of the trade receivables. Expected Credit Loss assessment for Trade and other receivables from customers as at 31st March 2020 and 31st March 2019 The Group from uses an allowance matrix to measure the expected credit losses of trade and other receivables from customers. The loss rates are computed using a ‘roll rate’ method based on the probability of receivable progressing through successive stages till full provision for the trade receivable is made. Roll rates are calculated separately for exposures based on common credit risk characteristics for a set of customers. The following table provides information about the exposure to credit risk and Expected Credit Loss Allowance for trade and other receivables: ` in Crores Gross carrying Weighted Loss allowance As at 31/03/2020 amount average loss rate - range Debts not due 2,769.66 0.30% 8.38 Debts over due 2,316.22 12.28% 284.47 Total 5,085.88 5.76% 292.85
` in Crores Gross carrying Weighted Loss allowance As at 31/03/2019 amount average loss rate - range Debts not due 4,316.29 0.19% 8.00 Debts over due 2,368.93 10.67% 252.77 Total 6,685.22 3.90% 260.77 The Group does not provide for any loss allowance on trade receivables where risk of default is negligible such as receivables from other oil marketing companies, if any, hence the same is excluded from above. Loss rates are based on actual credit loss experience over the past three years. The movement in the loss allowance in respect of trade and other receivables during the year was as follows:
` in Crores Balance as at 01st April 2018 264.34 Movement during the year (3.57) Balance as at 31st March 2019 260.77 Movement during the year 32.08 Balance as at 31st March 2020 292.85
Annual Report 2019-20 351 Note 58 Financial instruments (CONSOLIDATED) (Contd.) (b) Cash and cash equivalents and Other Bank Balances The Group held cash and cash equivalents and other bank balances of ` 1164.84 Crores at 31st March 2020 (Previous year ` 662.52 Crores). The cash and cash equivalents are held with banks with good credit ratings and financial institution counterparties with good market standing. Further, Group invests its short term surplus funds in bank fixed deposit, Government of India Treasury-bills, Tri Party Repo and liquid schemes of mutual funds, which carry no / low mark to market risks for short duration. These instruments do not expose the Group to credit risk. (c) Derivatives The derivatives are entered into with banks, financial institutions and other counterparties with good credit ratings. Further exposures to counter-parties are closely monitored and kept within the approved limits. (d) Investment in debt securities Investment in debt securities are mainly instruments such as loans to joint venture companies and investment in government securites which do not carry any significant credit risk. C.iii. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk is managed by Group through effective fund management. The Group has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Group has access to funds from debt markets through commercial paper programs, foreign currency borrowings and other debt instruments. The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments. Maturity Analysis of Significant Financial Liabilities
` in Crores Contractual cash flows As at 31/03/2020 Total Upto 1 year 1-3 years 3-5 years More than 5 years Non-derivative financial liabilities Bonds 18,538.61 677.10 8,727.89 675.73 8,457.89 OIDB Loans 1,352.22 478.76 655.06 218.40 - Term Loans 15,442.30 474.08 9,566.89 4,536.79 864.54 Non Convertible Debentures 2,874.62 178.24 1,616.18 1,080.20 - Foreign Currency Loans - Syndicated 9,637.36 3,480.47 335.11 5,821.78 - Short term borrowings 17,795.15 17,795.15 - - - Trade and other payables 13,107.21 13,107.21 - - - Other current liabilities 19,274.98 19,274.98 - - - Financial guarantee contracts* 673.64 673.64 - - -
352 Bharat Petroleum Corporation Limited Note 58 Financial instruments (CONSOLIDATED) (Contd.) ` in Crores Contractual cash flows As at 31/03/2019 Total Upto 1 year 1-3 years 3-5 years More than 5 years Non-derivative financial liabilities Bonds 19,410.16 2,057.75 4,724.20 4,261.62 8,366.59 OIDB Loans 1,560.15 583.69 697.80 278.66 - Term Loans 10,406.87 417.63 2,594.74 6,558.20 836.30 External Commercial Borrowings 34.59 34.59 - - - Non Convertible Debentures 3,052.98 178.39 906.51 1,968.08 - Foreign Currency Loans - Syndicated 10,886.19 253.17 3,220.62 7,412.40 - Short term borrowings 8,598.95 8,598.95 - - - Trade and other payables 17,834.47 17,834.47 - - - Other current liabilities 17,502.62 17,502.62 - - - Financial guarantee contracts* 633.59 52.55 581.04 - - Derivative financial liabilities Currency Swaps 214.97 214.97 - - - * Guarantees issued by the Group on behalf of joint venture are with respect to borrowings raised by the respective entity. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the subsidiary/joint venture have defaulted and hence, the Group does not have any present obligation to third parties in relation to such guarantees. C.iv. Market risk Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises four types of risk: currency risk, interest rate risk, commodity risk and other price risk. C.iv.a Currency risk The Group is exposed to currency risk on account of its operating and financing activities. The functional currency of the Corporation and its Indian Subsidiaries is Indian Rupee. Our exposure is mainly denominated in U.S. dollars (USD). The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Group has put in place a Financial Risk Management Policy to identify the most effective and efficient ways of managing the currency risks. The Group uses derivative instruments (mainly foreign exchange forward contracts) to mitigate the risk of changes in foreign currency exchange rates in line with our policy. The Group do not use derivative financial instruments for speculative purposes.
Annual Report 2019-20 353 Note 58 Financial instruments (CONSOLIDATED) (Contd.) Exposure to currency risk The currency profile in equivalent INR of financial assets and financial liabilities as at 31st March 2020 and 31st March 2019 : ` in Crores As at 31/03/2020 USD EURO JPY CHF Others Financial assets Cash and cash equivalents 40.60 0.05 - - 0.29 Trade receivables and other assets 1,311.72 0.19 - - 0.03 Net exposure for assets 1,352.32 0.24 - - 0.32
Financial liabilities Bonds 11,271.29 - - - - Foreign Currency Loans - Syndicated 8,864.19 - - - - Short term borrowings 7,666.75 - - - - Trade Payables and other liabilities 7,629.52 174.49 26.79 0.08 5.83 Add/(Less): Foreign curency forward (503.25) - - - - exchange contracts Net exposure for liabilities 34,928.50 174.49 26.79 0.08 5.83 Net exposure (Assets - Liabilities) (33,576.18) (174.25) (26.79) (0.08) (5.51)
` in Crores As at 31/03/2019 USD EURO JPY CHF Others Financial assets Cash and cash equivalents 11.95 0.31 - - 0.10 Trade receivables and other assets 273.40 0.18 - - 0.01 Net exposure for assets 285.35 0.49 - - 0.11
Financial liabilities Bonds 10,332.38 - - 1,390.54 - External Commercial Borrowings 34.59 - - - - Foreign Currency Loans - Syndicated 8,108.55 - - - - Short term borrowings 1,632.44 - - - - Trade Payables and other liabilities 10,373.61 205.18 12.81 12.44 4.01 Derivative instruments - Forwards 0.81 - - - - Add/(Less): Foreign curency forward (1,743.12) - - - - exchange contracts Add/(Less): Foreign currency swaps 1,579.11 - - (1,390.54) - Net exposure for liabilities 30,318.36 205.18 12.81 12.44 4.01 Net exposure (Assets - Liabilities) (30,033.01) (204.69) (12.81) (12.44) (3.90) Sensitivity analysis A reasonably possible strengthening (weakening) of the USD against INR at 31st March would have affected the measurement of financial instruments denominated in US dollars and affected profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalized to Property, Plant and Equipment or recognized direclty in reserves, the impact indicated below may affect the Group’s Profit and Loss Account over the remaining life of the related Property, Plant and Equipment or the remaining tenure of the borrowing respectively.
354 Bharat Petroleum Corporation Limited Note 58 Financial instruments (CONSOLIDATED) (Contd.) ` in Crores Profit or loss Effect in INR (before tax) Strengthening Weakening For the year ended 31st March 2020 3% movement USD (1,007.29) 1,007.29
` in Crores Profit or loss Effect in INR (before tax) Strengthening Weakening For the year ended 31st March 2019 3% movement USD (900.99) 900.99 C.iv.b Interest rate risk Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Group’s approach to managing interest rate risk is to have a judicious mix of borrowed funds with fixed and floating interest rate obligation. Exposure to interest rate risk Group’s interest rate risk arises primarily from borrowings. The interest rate profile of the Group’s interest- bearing financial instruments is as follows:
` in Crores Particulars Note As at As at Reference 31/03/2020 31/03/2019 Fixed-Rate instruments Financial Assets - measured at amortized cost Investment in debt instruments 8 0.01 0.01 Loan to Joint Venture 9 1,348.22 1,402.77 Financial Assets - measured at Fair Value through Profit & Loss Investment in debt instruments 14 5,208.54 5,075.89 Total of Fixed-Rate Financial Assets 6,556.77 6,478.67 Financial liabilities - measured at amortized cost Bonds 25 & 32 15,539.45 15,901.19 OIDB Loans 25 & 32 1,187.31 1,358.50 Non Convertible Debentures 25 2,299.48 2,299.32 Short term borrowings 30 10,054.63 1,737.19 Term Loan 25 31.76 29.27 Total of Fixed-Rate Financial Liabilities 29,112.63 21,325.47
Annual Report 2019-20 355 Note 58 Financial instruments (CONSOLIDATED) (Contd.) ` in Crores Particulars Note As at As at Reference 31/03/2020 31/03/2019 Variable-Rate instruments Financial Assets - measured at Fair Value through Profit & Loss Loan to Joint Venture 9 1,900.92 1,803.37 Total of Variable-Rate Financial Assets 1,900.92 1,803.37 Financial liabilities - measured at amortized cost Foreign Currency Loans - Syndicated 25 8,864.19 8,108.55 Short term borrowings 30 7,740.52 6,861.76 Term loans & External Commercial Borrowings 25 13,793.90 8,543.32 Total of Variable-Rate Financial Liabilities 30,398.61 23,513.63 Fair value sensitivity analysis for fixed-rate instruments The Group accounts for certain investments in fixed-rate financial assets such as investments in Oil bonds at fair value through profit or loss. Accordingly, a decrease in 25 basis point in interest rates is likely to increase the profit or loss (before tax) for the year ending 31st March 2020 by ` 54.48 Crores (Previous year ` 60.87 Crores) and an increase in 25 basis point in interest rates is likely to decrease the profit or loss (before tax) for the year ending 31st March 2020 by ` 55.19 Crores (Previous year ` 61.80 Crores). Cash flow sensitivity analysis for variable-rate instruments A reasonably possible change of 25 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. In cases where the related interest rate risk is capitalized to Property,Plant and Equipment, the impact indicated below may affect the Group’s income statement over the remaining life of the related Property,Plant and Equipment. ` in Crores Profit or (loss) Cash flow sensitivity (net) 0.25% 0.25% Increase Decrease As at 31/03/2020 Variable-rate loan instruments (69.57) 69.57 Cash flow sensitivity (net) (69.57) 69.57
As at 31/03/2019 Variable-rate loan instruments (54.55) 54.55 Cash flow sensitivity (net) (54.55) 54.55 C.iv.c Commodity rate risk Corporation’s profitability gets affected by the price differential (also known as Margin or Crack spread) between prices of products (output) and the price of the crude oil and other feed-stocks used in production (input). Prices of both are set by markets. Hence, Corporation uses derivatives instruments (swaps, futures, options, and forwards) to hedge exposures to commodity price risk to cover refinery operating cost using Basic Swaps on various products cracks like Naphtha, Gasoline (Petrol), Jet/Kerosene, Gasoil (Diesel) and Fuel Oil against Benchmark Dubai Crude. Further volatility in freight costs is hedged through Freight Forwards and bunker purchases. Settlement of all derivative transactions take place on the basis of monthly average of the daily prices of the settlement month quoted by Platts. Corporation measures market risk exposure arising from its trading positions using value-at-risk techniques. These techniques make a statistical assessment of the market risk arising from possible future changes in market prices over a one-day holding period.
356 Bharat Petroleum Corporation Limited Note 58 Financial instruments (CONSOLIDATED) (Contd.) Corporation uses historical model of VAR techniques based on variance/covariance to make a statistical assessment of the market risk arising from possible future changes in market values over a 24-hour period and within a 95% confidence level. The calculation of the range of potential changes in fair value takes into account positions and the history of price movements for last two years. VAR calculation for open position as on 31st March 2020 is as given below:
Brent Dt - HSFO - Regrade Gasoil - Gasoil - TD3C Product Dubai Dubai Naphtha Gasoline Unit USD/Bbl USD/Bbl USD/Bbl USD/Bbl USD/Bbl USD/MT Mean 0.78 (4.08) (1.06) 18.23 8.30 12.67 Standard Deviation 1.70 7.20 1.66 3.45 3.61 7.17 Max dev: 95% confidence 2.79 11.84 2.74 5.68 5.93 11.80 Mean +Max Dev:95% (2.01) 7.76 1.68 23.91 14.23 0.88 Avg.Trade Price 0.86 (5.95) (0.92) 14.20 12.90 13.52 Lots as on 31/03/2020 105.00 9.00 12.00 3.00 3.00 12.00 Standard Lot size 50000 BBL 50000 BBL 50000 BBL 50000 BBL 50000 BBL 5000 MT VAR USD million 15.08 6.17 1.56 1.46 0.20 7.59 Total Portfolio VAR in USD million (without considering inter- 32.06 commodity VaR correlation) C.iv.d Price risk The Corporation’s exposure to equity investments price risk arises from investments held by the Corporation and classified in the financial statements at fair value through OCI. The corporation intends to hold these investments for long-term for better returns and price risk will not be significant from a long term perspective. Exposure to price risk ` in Crores Profit or loss Other components of Equity Effect in INR (before tax) Strengthening Weakening Strengthening Weakening As at 31/03/2020 1% movement Investment in Oil India - FVOCI - - 2.21 (2.21) Investment in CIAL - FVOCI - - 0.67 (0.67) - - 2.88 (2.88)
` in Crores Profit or loss Other components of Equity Effect in INR (before tax) Strengthening Weakening Strengthening Weakening As at 31/03/2019 1% movement Investment in Oil India - FVOCI - - 4.96 (4.96) Investment in CIAL - FVOCI - - 1.14 (1.14) - - 6.10 (6.10)
Annual Report 2019-20 357
- - - - - 16.99 4,075.89 2,580.75 4,208.56 ` in Crores 16,721.39 Net Amount March 2020 and st - - - - 0.98 0.98 999.98 999.98 1,000.00 1,000.00 Amounts to be offset - - - - Related amounts not offset 0.98 17.97 5,075.89 3,580.75 5,208.54 17,721.37 Financial Instrument ------59.87 19.35 3,813.29 3,323.07 Net amounts balance sheet presented in the ------3,530.69 3,530.69 2,085.86 2,085.86 set off in the balance sheet Gross amounts ------3,590.56 7,343.98 2,105.21 5,408.93 Effect of offsetting on the balance sheet Gross amounts A A A A D D Note B & C B & C B & C B & C reference March 2019. st As at 31/03/2020 Financial assets Investment in GOI Bonds Particulars Trade and other receivables Financial liabilities Short term borrowings Trade and other payables As at 31/03/2019 Financial assets Investment in GOI Bonds Trade and other receivables Derivative Assets Financial liabilities Short term borrowings Trade and other payables Derivative Liabilities 31 The following table presents the recognized as at 31 The following financial instruments and other similar agreements that are not offset that are offset The column ‘net amount’ shows the impact on Corporation’s balance sheet if all set-off rights are exercised. N ote 58 F inancial instruments (CONSOLIDATED) (C ontd .) D. Offsetting
358 Bharat Petroleum Corporation Limited Note 58 Financial instruments (CONSOLIDATED) (Contd.) Notes A. The Corporation has Tri Party Repo limits from Clearing Corporation of India Limited, which are secured by Oil Marketing Companies GOI Special Bonds 2026 and Government Securities. As the Counterparty currently does not have a legally enforceable right to off set these amounts, these amounts have not been offset in the balance sheet, but have been presented separately in the table above. B. The Corporation purchases and sells petroleum products from different Oil Marketing Companies. Under the terms of the agreement, the amounts payable by the Corporation are offset against receivables and only the net amounts are settled. The relevant amounts have therefore been presented net in the balance sheet. C. The Corporation enters into derivative transactions under the International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. D. The Corporation enters into derivative transactions under the International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. The ISDA master netting agreements do not meet the criteria for offsetting in the balance sheet. This is because the Counterparty does not currently have legally enforceable right to offset recognized amounts, because the right to offset is enforceable only on the occurrence of future events. Note 59 Capital Management (CONSOLIDATED) The Group’s objective is to maximize the shareholders’ value by maintaining an optimum capital structure. Management monitors the return on capital as well as the debt equity ratio and makes necessary adjustments in the capital structure for the development of the business. The Group’s debt to equity ratio as at 31st March, 2020 is 1.63 (31st March 2019: 1.16). Note: For the purpose of computing debt to equity ratio, equity includes Equity Share Capital and Other Equity excluding Minority Interest Interest and Debt includes Long term borrowings, short term borrowings and current maturities of long term borrowings excluding lease obligations. Note 60 Segment reporting (CONSOLIDATED) A. Basis for segmentation The Group has following two reportable segments. Details of the segments are as follows: a) Downstream Petroleum ie. refining and marketing of petroleum products. b) Exploration and Production of hydrocarbons (E & P) Segments have been identified taking into account the nature of activities and its risks and returns. Committee of Functional Directors (CFD), periodically reviews the internal management reports and evaluates performance/allocates resources based on the analysis of various performance indicators relating to the segments referred to above.
Annual Report 2019-20 359 - - Total 553.45 937.32 155.26 256.86 1,071.97 4,377.52 8,527.85 1,049.66 3,417.77 1,763.95 11,694.46 11,694.46 11,538.99 40,462.17 18,088.74 55,633.45 96,095.62 11,117.50 ` in Crores 340,879.15 340,879.15 125,391.39 136,930.38 - - March 2019 st E&P 2.03 34.44 130.55 344.06 105.77 1,057.01 17,645.64 11,208.87 - - 593.26 For the year ended 31 6,879.87 3,383.33 Petroleum 11,692.43 40,356.40 10,060.49 340,748.60 107,745.75 Downstream - - Total 646.96 222.65 (14.21) 2,958.58 2,958.58 1,059.72 1,400.67 3,665.78 4,080.09 2,504.14 2,637.01 11,509.46 42,554.06 69,720.84 21,532.11 12,950.11 329,797.16 329,797.16 139,354.10 150,863.56 112,274.90 - - March 2020 st E&P 47.01 106.47 936.78 277.88 (694.52) 1,469.47 22,300.21 14,203.28 - - 463.89 For the year ended 31 3,653.10 7,328.83 4,033.08 Petroleum 42,276.18 11,480.64 329,690.69 117,053.89 Downstream Information about reportable segments Information after tax is used to measure performance because management believes related to each reportable segment is set out below. Segment profit/(loss) that this information is the most relevant in evaluating results of respective segments relative to other entities operate same industry. Particulars* Revenue External Customers Inter-segment Total Revenue Results Segment Results Unallocated Corporate Expenses b) Other Income (excluding Interest Income) Operating Profit Add: a) Interest Income c) Share of profit equity accounted investees Profit / (Loss) after tax Other Information Segment assets Unallocated Corporate Assets d) Fair valuation gain on instruments measured at FVTPL Total Assets Segment liabilities Unallocated Corporate Liabilities Segment assets include: Investment in equity accounted investees Capital expenditure Total Liabilities Depreciation and amortization Material Non-cash expenses other than depreciation and amortization b) Income tax (including deferred tax) e) Derivatives at FVTPL Less: a) Finance Cost
N ote 60 S egment reporting (CONSOLIDATED) (C ontd .) B. * For the purposes of review by the Committee of Functional Directors (CFD), information referred to above is measured consistent with the accounting policies applied for preparation consistent with the accounting policies applied for is measured to above information referred Functional Directors (CFD), the Committee of by review * For the purposes of of these financial statements.
360 Bharat Petroleum Corporation Limited Note 60 Segment reporting (CONSOLIDATED) (Contd.) C. Geographic information The geographic information analyses the Group’s revenue and non-current assets by the country of domicile and other countries. In presenting the geographical information, segment revenue has been based on the geographic selling location and segments assets were based on the geographic location of the respective non-current assets. ` in Crores For the year ended For the year ended Geography 31st March, 2020 31st March, 2019 I) Revenue India 329,797.16 340,879.15
Other Countries Mozambique - - Singapore - - Other Countries - -
Total Revenue 329,797.16 340,879.15
II) Non-current Assets * India 80,448.07 66,238.13
Other Countries Mozambique 7,278.64 5,356.48 Singapore 8,944.21 7,167.59 Other Countries# 5,444.58 4,447.45
Total Non-current Assets 102,115.50 83,209.65 * Non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets and rights arising from insurance contracts. # Non current assets of PPE related to retail outlets lying in Bhutan are grouped under this head. Note 61 Micro, Small and Medium Enterprises (CONSOLIDATED) To the extent, the Corporation has received intimation from the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act (MSMED), 2006, the details are provided as under:
` in Crores Particulars As at 31/03/2020 As at 31/03/2019 Principal amount overdue (remaining unpaid) as on 31st March - 0.57 Interest due thereon remaining unpaid as on 31st March - 0.01 Payment made during the year after the due date* Principal - - Interest - - Interest accrued and remaining unpaid as at 31st March 0.01 0.01 *Undisputed payments to Micro and Small enterprises during the year are made as per the MSMED Act, 2006.
Annual Report 2019-20 361 Note 62 Contingent Liabilities and Capital Commitments (CONSOLIDATED)
` in Crores Particulars As at 31/03/2020 As at 31/03/2019 (a) Contingent Liabilities : In respect of Income Tax matters 791.88 55.25 Other Matters : i) Claims against the Group not acknowledged as debts * : Excise and customs matters 415.60 1,306.19 Service Tax matters 6.68 45.59 Sales Tax matters 3,369.02 10,437.68 Land Acquisition cases for higher compensation 126.97 126.93 Others 251.78 294.56 * These include ` 1,263.59 Crores (Previous year ` 7696.90 Crores) against which the Group has a recourse for recovery and ` 121.69 Crores (Previous year ` 118.78 Crores) which are on capital account. ii) Claims on account of wages, bonus / ex-gratia payments 29.65 25.81 in respect of pending court cases iii) Guarantees 1,071.33 149.13 iv) Share of Interest in Joint Ventures & Associates 1,034.17 1,046.58 (b) Capital Commitments : i) Estimated amount of contracts remaining to be executed 6,295.01 6,811.97 on capital account and not provided for ii) Share of Interest in Joint Ventures & Associates 1,830.50 1,969.37
362 Bharat Petroleum Corporation Limited Note 63 Non-Controlling Interests (NCI) (CONSOLIDATED) Below is the partly owned subsidiary of the Company and the respective share of the non-controlling interests.
S. Name Country of Incorporation Non-controlling interest No. As at As at 31/03/2020 31/03/2019 1. Numaligarh Refinery Limited India 38.35% 38.35% The principal place of business of the entity listed above is the same as their respective country of incorporation. The following table comprises the information relating to the subsidiary that has material Non-Controlling Interest (NCI): ` in Crores Numaligarh Refinery Limited Particulars As at 31/03/2020 As at 31/03/2019 NCI percentage 38.35% 38.35%
Non Current Assets 3,857.50 3,765.12 Current Assets 3,104.59 3,670.57 Non Current Liabilities 289.17 345.37 Current Liabilities 1,280.92 1,604.16 Net Assets 5,392.00 5,486.16 Net assets attributable to NCI (before adjustment) 2,067.88 2,103.94 Less: Elimination of Stock Margin 11.55 33.90 Net assets attributable to NCI (after adjustment) 2,056.33 2,070.04 Revenue 14,242.10 18,634.64 Profit 1,533.45 1,980.28 Other Comprehensive Income (31.30) 1.52 Total Comprehensive Income 1,502.15 1,981.80 Profit allocated to NCI 610.42 725.55 OCI allocated to NCI (12.00) 0.58 Total Comprehensive Income allocated to NCI 598.42 726.13 Cash flow from operating activities 1,398.93 2,033.12 Cash flow from investing activities 362.20 (400.62) Cash flow from financing activities (1,695.07) (1,727.38) Net Increase/(decrease) in cash and cash equivalents 66.06 (94.88) Dividends paid to Non-controlling interest (Including DDT) (612.19) (561.17)
Annual Report 2019-20 363 1.51 2.99 0.34 18.74 15.33 40.13 64.48 10.01 (1.78) (0.98) 817.57 (598.42) (403.59) 2,185.20 1,502.15 ` Crores Amount in 0.00% 0.10% 0.50% 0.40% 1.10% 1.80% 0.30% 0.00% 0.00% 0.00% 59.70% 22.30% 41.10% Share in Total -16.50% -11.00% Income Comprehensive Income As % of Total Comprehensive ------0.04 0.01 12.00 (1.84) (0.04)
(31.30) (497.99) 1,119.31 ` Crores Amount in ------2.00% -5.20% -0.30% -83.00% 186.50% Share in Other Income As % of Comprehensive Income Comprehensive Consolidated Other Consolidated 1.51 2.95 0.34 18.73 15.33 40.13 64.52 10.01 (1.78) (0.98) (301.74) (610.42) (401.75) 2,683.19 1,533.45 ` Crores Amount in Share in 0.00% 0.10% 0.60% 0.50% 1.30% 2.10% 0.30% 0.00% Profit or Loss -9.90% -0.10% -0.00% 87.70% 50.20% -20.00% -13.10% As % of Consolidated Profit or Loss 5.69 24.06 89.24 86.84 19.72 299.75 100.51 150.19 298.40 144.94 3,715.41 5,392.00 3,087.91 ` Crores 33,214.38 Amount in (2,056.33) 0.80% 8.50% 0.10% 0.20% 0.30% 0.40% 0.80% 0.20% 0.40% 0.00% 0.10% -5.60% 90.90% 10.20% 14.80% As % of minus Total Liabilities Net Assets Consolidated Net Assets i.e. Total Assets Net Assets Parent Bharat Petroleum Corporation Limited Subsidiaries Indian Bharat PetroResources Limited Numaligarh Refinery Limited Bharat Gas Resources limited Non-Controlling interest Joint Ventures Indian Bharat Oman Refineries Limited Bharat Renewable Energy Limited * Bharat Stars Services Private Limited Central U.P. Gas Limited Delhi Aviation Fuel Facility Private Limited Maharashtra Natural Gas Limited Sabarmati Gas Limited Mumbai Aviation Fuel Farm Facility Private Limited Kochi Salem Pipeline Private Limited BPCL- KIAL Fuel Farm Facility Private Limited Haridwar Natural Gas Private Limited Name of the Entity 1. 2. 3. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. S. No. N ote 64 D isclosures as re q uired under schedule III to the companies act , 2013 wit H respect C onsolidated F inancial S tatements (CONSOLIDATED)
364 Bharat Petroleum Corporation Limited - 0.45 0.68 (1.47) (4.99) (1.30) (3.97) (4.79) (4.54) 345.10 282.98 (606.63) 3,655.20 ` Crores Amount in - 100% 0.00% 0.00% 9.40% 7.70% 0.00% -0.00% -0.10% -0.10% -0.10% -0.10% Share in Total -16.50% Income Comprehensive Income As % of Total Comprehensive - - - - - 0.34 (0.01) (0.04) (0.26) (0.01) (0.34) (0.03)
599.84 ` Crores Amount in - - - - - 100% 0.00% 0.00% 0.00% 0.10% 0.00% 0.00% -0.10% Share in Other Income As % of Comprehensive Income Comprehensive Consolidated Other Consolidated - 0.11 0.68 (1.47) (4.99) (1.30) (3.96) (4.75) (4.28) 345.11 283.32 (606.60) 3,055.36 ` Crores Amount in - Share in 100% 0.00% 9.30% 0.00% Profit or Loss -0.00% -0.20% -0.00% -0.10% -0.20% -0.10% 11.30% -19.90% As % of Consolidated Profit or Loss - 0.42 15.61 36.28 24.95 15.38 97.30 50.21 45.15 204.25 1,397.66 1,207.84 ` Crores 36,532.33 Amount in (11,135.43) - March 2019 is shown. st 100% 0.00% 0.10% 0.10% 0.00% 0.30% 0.10% 0.10% 3.80% 3.30% 0.60% 0.00% -30.50% As % of minus Total Liabilities Net Assets Consolidated Net Assets i.e. Total Assets Net Assets Goa Natural Gas Private Limited Ratnagiri Refinery & Petrochemicals Limited IHB Private Limited Foreign Matrix Bharat Pte Ltd Associates GSPL India Gasnet Limited GSPL India Transco Limited Fino PayTech Limited Petronet LNG Limited Petronet CI Limited * Indraprastha Gas Limited Petronet India Limited* Petroleum India International** Intra Group Elimination Total Name of the Entity Kannur International Airport Limited # 12. 13. 14. 1. 2. 3. 4. 5. 6. 7. 8. 9. S. No. * Associates / Joint Ventures have not been considered for consolidation. ** Petroleum India International has been dissolved and the capital contribution received by corporation. # Kannur International Airport Limited - Values as on 31 N ote 64 D isclosures as re q uired under schedule III to the companies act , 2013 with respect C onsolidated F inancial S tatements (CONSOLIDATED) ( contd .)
Annual Report 2019-20 365 Note 65 Revenue from Contracts with Customers in respect of the Corporation (CONSOLIDATED) A. Contract balances ` in Crores As at As at 31/03/2020 31/03/2019 Contract liabilities 302.45 201.68 The contract liabilities primarily relates to the liability towards customer loyalty program for unutilized points and the upfront bidding fees/fixed fees pertaining to Retail Outlets.
` in Crores Movement in contract liabilities is as follows 2019-20 2018-19 At beginning of the year 201.68 165.02 Increases due to cash received, excluding amounts recognized as revenue 160.46 84.53 during the year Revenue recognized that was included in the contract liability balance at the 59.69 47.87 beginning of the year At end of the year 302.45 201.68 Note 66 Additional information as appearing in the financial statements of BPRL (CONSOLIDATED) I. Joint Operations The Group has participating interest in the nature of Production Sharing Contracts (PSC) with the Government of India and/or various bodies corporate in the oil and gas blocks for exploration, development and production activities. The arrangements require consent from consortium partners for all relevant activities and hence it is classified as joint operations. The partners to the agreement have direct right to the assets and are jointly liable for the liabilities incurred by the un-incorporated joint operation. In accordance with Ind AS 111 on “Joint Arrangements”, the financial statements of the Group includes the Group’s share in the assets, liabilities, incomes and expenses relating to joint operations based on the financial statements received from the respective operators. As per the PSC, the operator has to submit audited financial statements within 60 days from the end of the year. The income, expenditure, assets and liabilities of the joint operations are merged on line by line basis according to the participating interest with the similar items in the Financial Statements of the Group as given below: i) In respect of Block CB/ONN/2010/8 and CB/ONHP/2017/9 , the Group is operator. The Group is also operator for five DSF blocks in which it holds 100% participating interest. The Group’s share of the assets, liabilities, income and expenditure have been recorded under respective heads based on the audited financial statements. ii) Out of the remaining eight Indian Blocks (Previous year six), two blocks RJ/ONN/2005/1 and MB/ OSN/2010/2 have been proposed for relinquishment for which approval is pending from Director General of Hydrocarbons (DGH). Out of the remaining six Indian Blocks (Previous year four), the Group has received Nil (Previous year one) audited financial statements as at March 31, 2020 and this has been considered in the financial statements of the Group. The Group has received unaudited financial statements for three (Previous year two) blocks and billing statement (Statement of Expenses) for remaining three blocks from the operator for the period upto 31st March 2020. In case of five blocks out of the above, assets, liabitilities, income & expenses are accounted. In case of remaining one block, in absence of the details of assets & liabilities, only income and expenses are accounted. iii) In respect of both (Previous year one) the Joint Venture blocks, EP413 and Block 32 (blocks outside India) the assets, liabilities, income and expenditure have been incorporated on the basis of unaudited financial statements as at 31st March 2020.
366 Bharat Petroleum Corporation Limited iv) In respect of blocks in Mozambique and Indonesia (Previous year both) the Group has accounted the income and expenses based on the billing statements (Statement of Expenses) received from the operator for the period upto 31st March 2020. Details of the Group’s Participating Interest (PI) in the blocks are as under:
Participating Interest Name Company Country of the Group 31/03/2020 31/03/2019 Blocks In India NELP – IV CY/ONN/2002/2 BPRL India 40.00% 40.00%
NELP – VI CY/ONN/2004/2 BPRL India 20.00% 20.00%
NELP – VII RJ/ONN/2005/1 BPRL India 33.33% 33.33%
NELP – IX CB/ONN/2010/11 BPRL India 25% 25% AA/ONN/2010/3 BPRL India 20% 20% CB/ONN/2010/8 BPRL India 50% 25% MB/OSN/2010/2 BPRL India 20% 20%
Discovered Small Fields (DSF) CY/ONDSF/KARAIKAL/2016 BPRL India 100% 100% RJ/ONDSF/BAKHRI BPRL India 100% 100% TIBBA/2016 RJ/ONDSF/SADEWALA/2016 BPRL India 100% 100% MB/OSDF/B15/2016 BPRL India 100% 100% MB/OSDF/B127E/2016 BPRL India 100% 100%
OALP CB-ONHP-2017/9 BPRL India 60% 100% AA-ONHP2017/12 BPRL India 10% - CY-ONHP-2017/1 BPRL India 40% -
Blocks Outside India JPDA 06-103 (e) BPRL JPDA Australia / 20.00% 20.00% Timor EP-413 BPRL Australia 27.80% 27.80% Block 32 BPRL Israel 25.00% -
Mozambique Rovuma Basin BPRL Ventures Mozambique 10.00% 10.00% Mozambique B.V. Nunukan PSC, Tarakan Basin BPRL Ventures Indonesia Indonesia 12.50% 12.50% B.V.
Annual Report 2019-20 367 Note 66 Additional information as appearing in the financial statements of BPRL (CONSOLIDATED) (Contd.) The table below provides summarized financial information of the Group’s share of assets, liabilities, income and expenses in the joint operations:
` in Crores S. 31/03/2020 31/03/2019 Particulars No. 1. Property, Plant and Equipment 0.80 0.88 2. Other Intangible assets 103.74 109.38 3. Intangible asset under development* 8,237.89 6,158.92 4. Other Non-current Assets 7.34 4.99 5. Current Assets including financial assets** 50.84 48.10 6. Cash and Bank Balances 2.68 3.91 7. Current & Non-current Liabilities/Provisions including 350.40 186.60 financial liabilities 8. Expenses incurred during the year 20.99 26.24 9. Income recognized during the year 106.47 130.81 * Includes ` 741.86 Crores (Previous year ` 129.74 Crores) which has been provided for by the Group. ** Includes ` 10.67 Crores (Previous year ` 10.70 Crores) which has been provided for by the Group. II. Details of Reserves BPRL’s share of Estimated Ultimate Recovery (EUR) as approved by Operator’s Reserves Estimation Committee (REC) for the block CY-ONN-2002/2 as at 31st March 2020 is given below:
Crude Oil Gas (MMm3) Project Details (MMm3) CY-ONN-2002/2 Opening 0.24 1,062.35 Production 0.04 12.30 Closing 0.20 1,050.05 MMm3 = Million Cubic Meters Note 67 Consolidated In pursuance to Section 115BAA of the Income Tax Act, 1961 announced by Government of India through Taxation Laws (Amendment) Ordinance, 2019, Corporation has an irrevocable option of shifting to a lower tax rate and simultaneously forgo certain tax incentives including loss of the accumulated MAT Credit. The Corporation has not exercised this option in the current period due to unutilized MAT Credit available in the books. However, its Subsidiary Companies NRL & BGRL have adopted the option available under Section 115BAA of Income Tax Act, 1961. Note 68 Consolidated The Corporation has decided to transfer its Gas business into a separate wholly owned subsidiary named Bharat Gas Resources Limited. Accordingly, the carrying amount of the assets and liabilities as at 31st March 2020 and 31st March 2019 pertaining to the Gas business were shown as a part of Disposal Group in Standalone Financial Statements, while in Consolidated Financial Statements, the same have been presented in their respective heads of Assets and Liabilities.
368 Bharat Petroleum Corporation Limited Note 69 Consolidated Due to COVID-19 pandemic, there has been significant volatility and sharp reduction in the prices of Crude Oil and Petroleum Products, which has resulted in significant write-down of Inventories to Net Realizable Value (NRV). Accordingly, Group has shown an amount of ` 1310.35 Crores as an exceptional item in the Statement of Profit and loss. Details of inventories write-down to NRV is as under:
` in Crores Paticulars 2019-20 Raw Material 54.97 Finished Goods, Stock-in-trade & Stock-in-process 1,255.38 Total 1,310.35 Note 70 Consolidated The outbreak of COVID-19 globally and resultant lockdown in many countries, including from 25th March 2020 in India, has had impact on the business of the Group. Consequently lower demand for crude oil and petroleum products has impacted the prices and therefore refining margins globally. Due to this, certain finished goods inventory and certain raw materials of the Group have been valued at net realizable value/replacement costs which are lower than cost. The impact of the same has been reported under exceptional item. Since petroleum products are under essential services, the refining and marketing operations of the Group were continued during the lock down period, though there were some postponement of project related activities. Due to the lock down there was reduction in sales for the Group, however the reduction in sales is not material for the year 2019-20. The lock down of COVID-19 is continuing in FY 2020-21 and the Group is continuing its operations in major business units with current lower demand as these products are falling under essential goods and services. The Group is expecting that demand for products will improve on stabilization of COVID-19, post removal of lock down. It has assessed the potential impact of COVID 19 based on the current circumstances and expects no significant impact on the continuity of operations of the business on long term basis/ on useful life of the assets/ on financial position etc. though there may be lower revenues and refinery throughput in the near term. The Group will continue to closely monitor any material changes to future economic conditions. Note 71 Consolidated Figures of the Previous year have been regrouped wherever necessary, to conform to current year presentation.
For and on behalf of Board of Directors As per our attached report of even date For and on behalf of Sd/- D. Rajkumar CVK & Associates Borkar & Muzumdar Chairman and Managing Director Chartered Accountants Chartered Accountants DIN: 00872597 ICAI FR No.101745W ICAI FR No. 101569W
Sd/- Sd/- Sd/- Sd/- N. Vijayagopal V. Kala A.K. Pradhan Kaushal Muzumdar Director (Finance) Company Secretary Partner Partner DIN: 03621835 Membership No. 032156 Membership No. 100938
Place : MUMBAI Date : 03rd June 2020
Annual Report 2019-20 369 Form AOC-I (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the Financial Statements of Subsidiaries / Associate Companies / Joint Ventures for the financial year ended 31st March 2020 Part “A”: Subsidiaries
S. No. Particulars ` in Crores 1. Name of the subsidiary Numaligarh Bharat Bharat Gas Refinery PetroResources Resources Limited* Limited * Limited 2. The date of incorporation/ since when subsidiary was 07-11-2006 17-10-2006 07-06-2018 acquired 3. Reporting period for the subsidiary concerned, if NA NA NA different from the holding company's reporting period 4. Reporting Currency and Exchange rates as on the last NA NA NA date of the relevant Financial Year in case of foreign subsidiaries 5. Share Capital 735.63 5,000.00 308.62 6. Reserves & Surplus 4,656.37 (1,284.59) (8.88) 7. Total Assets 6,962.09 24,568.14 382.89 8. Total Liabilities 1,570.09 20,852.73 83.14 9. Investments 355.55 14,203.28 - 10. Turnover 14,071.79 106.47 273.35 11. Profit/(loss) before Taxation (A) 1,886.68 (310.54) 2.94 12. Provision for taxation (B) 353.23 (8.80) 1.44 13. Profit after Taxation (A) - (B) 1,533.45 (301.74) 1.51 14. Extent of shareholding (in percentage) 61.65% 100.00% 100.00% * figures based on consolidated financial statements of the Company.
370 Bharat Petroleum Corporation Limited Not Note 2 Note 2 Note 3 Note 5 ( ` in Crores) Consolidation Considered in 7 - - - - 0.11 2.85 0.68 0.34 15.89 63.85 38.91 10.01 18.73 (3.96) (4.75) (8.51) (1.09) (4.99) (1.30) (1.78) (1.47) 306.34 274.94 (393.03) Profit / Loss for the year Consolidation Considered in - - -
0.44 5.35 97.30 15.38 50.21 21.67 60.00 11.11 36.28 15.61 86.84 70.50 24.95 100.51 237.83 144.94 117.22 971.03 171.89 3,087.91 1,278.82 6 Networth attributable to Balance Sheet Shareholding as per latest audited (Refer Note No. 4) (Refer Note Borkar & Muzumdar Chartered Accountants ICAI FR No. 101569W Sd/- Kaushal Muzumdar Partner Membership No. 100938 5 / Joint Note 5 Note 2 Note 2 Note 3 For and on behalf of Reason why consolidated the associate Venture is not March 2020. As per our attached report of even date st 4 influence agreement By virtue of Description of how there Shareholding is significant / Joint Venture -
16.00% 33.33% 11.00% 11.00% 50.00% 37.00% 11.00% 16.20% 50.00% 25.00% 20.73% 50.00% 49.94% 50.00% 25.00% 74.00% 22.50% 50.00% 25.00% 63.38% 25.00% 12.50% 22.50% Extent of Holding (in percentage) - 0.16 3.36 1.58 8.41 6.66 60.68 54.12 10.00 50.00 22.20 26.25 22.50 17.50 48.29 15.00 98.75 31.50 CVK & Associates Chartered Accountants ICAI FR No.101745W Sd/- A.K. Pradhan Partner Membership No. 032156 103.62 216.80 251.00 122.40 152.50 3 1,538.61 Amount of Joint Venture Associates or Investment in - No. 33,60,000 15,84,000 20,00,000 99,87,400 66,60,000 held by the company on year end 1,49,99,600 Shares of Associate or Joint Ventures 1,60,00,000 6,06,80,000 5,41,20,000 2,16,80,000 1,00,00,000 5,00,00,000 2,84,35,423 2,22,00,000 2,62,50,000 2,24,99,600 1,75,00,000 4,82,88,750 10,36,22,128 15,25,00,000 18,75,00,000 15,75,00,400 1,53,82,16,114 2 or Joint acquired 19-05-2008 18-10-2000 17-12-1998 30-04-2012 03-03-2008 22-09-2009 30-04-2012 31-03-2014 25-04-2007 14-06-2017 29-07-2016 24-12-2015 01-03-1986 04-04-2006 30-12-2014 09-07-2019 29-12-2014 26-07-2004 21-11-2016 06-03-2014 23-12-1993 26-07-2004 24-05-2001 27-04-2000 Venture was the Associate associated or Date on which P art “B”: A ssociates and J oint V entures 1 Date 31-Mar-18 31-Mar-20 31-Mar-20 31-Mar-20 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-19 31-Mar-19 31-Mar-20 31-Mar-19 31-Mar-20 31-Mar-20 31-Mar-19 31-Mar-19 31-Mar-20 31-Mar-20 31-Mar-20 31-Mar-19 31-Dec-19 31-Mar-19 31-Mar-19 Sd/- V. Kala Company Secretary Latest audited Balance Sheet 2 5 3 4 7 4 4 4 8 4 Note 2 & 6 1 & 4 1 & 4 1 & 4 1 & 4 Refer Statement pursuant to Section 129 (3) of the Companies Act, 2013 related Associate and Joint Ventures June 2020 rd Equity method of accounting in respect of Investment have not been considered in the preparation of Consolidated Financial Statements as the parent company has decided to exit from these Joint Ventures and provision for full decided to exit from these Joint Ventures and provision for has the parent company Financial Statements as Consolidated not been considered in the preparation of Investment have of accounting in respect Equity method of diminution in the value of investment has been done standalone financial statements parent company. the purpose of been considered for financial statements provided by the respective management have and Joint Venture companies are yet to be audited hence the provisional these Associates The financial statements of preparation of Consolidated Financial Statements. : MUMBAI : 03 GSPL India Gasnet Limited Bharat Renewable Energy Limited Petronet CI Limited Petronet India Limited Delhi Aviation Fuel Facility Private Limited GSPL India Transco Limited Matrix Bharat Pte Limited Ratnagiri Refinery & Petrochemical Limited Kannur International Airport Limited Bharat Stars Services Private Limited Fino PayTech Limited Kochi Salem Pipeline Private Limited Haridwar Natural Gas Private Limited Petroleum India International IHB Private Limited Sabarmati Gas Limited Goa Natural Gas Private Limited Mumbai Aviation Fuel Farm Facility Private Limited BPCL-KIAL Fuel Farm Private Limited Maharashtra Natural Gas Limited Bharat Oman Refineries Limited Central UP Gas Limited Petronet LNG Limited Name of Associates or Joint Ventures Indraprastha Gas Limited 9. 8. 7. 6. 5. 3. 4. 2. 1. Sd/- D. Rajkumar Chairman and Managing Director DIN: 00872597 Sd/- N. Vijayagopal For and on behalf of Board Directors Director (Finance) DIN: 03621835 Place Date 13. 10. 11. 12. 14. 22. 15. 16. 17. 20. 21. 23. 24. 18. 19. S. No. During the year 2017-18, BPCL along with IOCL and HPCL has incorporated a company under Section 8 of Companies Act, 2013 named as Ujjwala Plus Foundation, limited by guarantee. Note 1 : Figures based on consolidated financial statements of the Company. Note 2 : Note 3 : Kannur international airport limited has not prepared financial statements for 2019-20 & hence considered consolidation the year Note 4 : Note 5 : Petronet India Limited is under liquidation Note 6 : Percentage of holding disclosed is based on Joint Venture agreement. Note 7 : During the year 2019-20 Petroleum India International has been dissolved. Note 8 : 36,11,11,111 warrants issued by Bharat Oman Refineries Limited (BORL) to BPCL have been converted 64,96,02,778 equity shares of BORL on 31
Annual Report 2019-20 371 NOTES
372 Bharat Petroleum Corporation Limited Touching Lives
Agriculture training to farmers in Gadchiroli, Maharashtra Employee Volunteering - cleaning Mithi River, Mumbai Cataract surgery at Papum Pare, Arunachal Pradesh Learning at Akshar Nandurbar, Maharashtra Skill Development training at SDI, Kochi Rainwater harvesting at Tuticorin www.bharatpetroleum.in @BPCLimited BharatPetroleumcorporation company/bpcl @bpclimited user/bpclbrand